The relationship between social responsibility performance, financial crisis and business life cycle

Document Type : Original Article

Authors

1 Associate Professor, Faculty of Management and Accounting, Islamic Azad University, Qazvin branch, Iran

2 M.A. in Accounting, Faculty of Management and Accounting, Islamic Azad University, Qazvin branch, Iran

Abstract

This research was done with the aim of investigating the effect of social responsibility performance on the financial crisis at different stages of the company's life cycle. Research data was collected from the stock exchange. The present study is empirical in terms of purpose and descriptive-analytical in terms of inference. Also, this research is post-event in terms of research design. The statistical population of this study are all the companies listed on the Tehran Stock Exchange during the period 2012 to 2016 (5-year period). The screening method was used to select the sampling method. The total number of companies used in the study sample is 141. In this study, the research hypotheses were analysed using the collected data, using the Excel spreadsheet and EViews software. The Generalized Estimated Least Squares (EGLS) method has been used to test the research models. The results showed that there is a significant negative relationship between social responsibility performance and financial crisis. The relationship between performance of social responsibility and financial crisis in the growth stage, is stronger than in the maturity stage. The relationship between performance of social responsibility and financial crisis in the growth phase, is stronger than in the decline phase. Also, the relationship between social responsibility performance and financial crisis in the maturity stage, is stronger than in the decline stage.

Keywords

Main Subjects


Adizes, I. (1989). Corporate Life Cycle: How and Why Corporations Grow and Die and What Do about it. Englewood Cliffs, NJ.
Ahmed, K., Mercier, J.R. & Verheem, R. (2005). Strategic Environmental Assessment-Concept and Practice. Environment Strategy, 14, 21-24.
Al-Hadi, A., Chatterjee, B., Yaftian, A., Taylor, G. & Hasan, M.M. (2017). Corporate social responsibility performance, financial distress and firm life cycle: Evidence from Australia. Accounting and Finance Early view Inpress.
Altman, E.I. (1968). Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. Journal of Finance, 23(4), 589-609.
Anthony, J. & Ramesh, K. (1992). Association between accounting performance measures and stock prices: a test of the life cycle hypothesis. Journal of Accounting and Economics, 15, 203-227.
Black, E.L. (1998). Life-Cycle Impacts on the Incremental Relevance of Earnings and Cash flow Measures. Journal of Financial Statement Analysis, 40-56.
Dalkmann, H., Daniel, B. & Rodrigo, J. (2004). Analytical Strategic Environmental Assessment (ANSEA) Developing A New approach to SEA. Environmental Impact Assessment Review, 24(4), 385-402.
Hicks, H.G. & Goulet, C. (1997). Theory of Organization and Management. Volume II translated By Kohan. G, Tehran: Douran Press.
Kallunki J. & Silvola, H. (2008). The effect of Organizational Life Cycle Stage on the use of Activity-based Costing. Management Accounting Research, 19, 62–79.
Kim, Y., Park, M.S. & Wier, B. (2012). Is Earnings Quality Associated with Corporate Social Responsibility? Accounting Review, Forthcoming. Available at: SSRN: https://ssrn.com/abstract=1899071.
Kotler, P., Hessekiel, D., & lee, N. (2012). Good Works: Marketing and corporate initiatives that build a better world and the bottom line. Hoboken, NJ: john Wily & Sons.
Microsoft (2013). Citizenship report. Retrived April 18, 2014, from http://www.microsoft.com/about/corporateciti zenship/en-us/reporting.
Microsoft (2014). Microsoft accessibility: Mission. Retrieved from http://microsoft.com/enable/microsoft/mossion.Aspx.
Nilsson, M. & Holger, D. (2001). Decision Making and Strategic Environmental Assessment. Journal of Environmental Assessment Policy and Management, 3(3), 305-327.
Park, Y. & Chen, K.H. (2006). The effect of accounting conservatism and life-cycle stages on firm valuation Journal of Applied Business Research, 22(3), 75-92. 
Park, S., Song, S & Lee, S. (2017). Corporate social responsibility and systematic risk of restaurant firms: the moderating role of geographical diversification. Tourism Management, 59, 610-620.
Partidário, M.R. (1998). Significance and Future of Strategic Environmental Assessment. International Workshop on Strategic Environmental Assessment. Available at: http://www.env.go.jp/policy/assess//2- trategic/4workshop/s-p13.pdf.
Porter, M.E. & Kramer, M.R. (2011). The big idea :Creating shared value. Harvard Business Review, 89(1/2), 62-77.
Servaes, & Tamayo, A. (2013). The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Avareness. Management Science, 59(5), 1045-1061.
Utami, S.R. & Inanga, E.L. (2012). The relationship between capital structure and the life cycle of firms in the manufacturing sector of Indonesia. International Research Journal of Finance and Economics, 88, 66-91.
Xu, B. (2007). Life cycle effect on the value relevance of comman risk factor. Review of accounting and finance, 6, 162-175.
Volume 2, Issue 1
March 2019
Pages 22-39
  • Receive Date: 27 November 2018
  • Revise Date: 03 January 2019
  • Accept Date: 21 January 2019