Professional Documents
Culture Documents
CSR
CSR
performance has been intensely examined in prior studies and showed a positive
relationship between CSR and financial performance (Freeman 1984; Sen et al.
2006; Barney, 1991; Jones, 1995; Margolis and Walsh 2001). Good CSR image was
proved to be able to improve relationship between company and stakeholders
(Waddock and Graves, 1997a; Fombrun and Shanley; 1990). Better relationships
with firm stakeholders can enhance a firms sustainability and financial performance
(Legnick-Hall 1996; Whitehouse 2006). However, researches rarely discussed about
whether the financial performance was manipulated in order to gain better CSR
image, or vice versa. Attig et al.(2013) indicated that CSR investmentsparticularly
those that extend beyond compliance behavior to reflect what is desired by society
can lead to lower financing costs resulting from higher credit ratings. That is, the
control of CSR investments to fulfill the societys anticipation can get a better rating
from outsiders. Hoi, Wu and Zhang(2013) examined the empirical association
between CSR and tax avoidance and find that firms with excessive irresponsible CSR
activities have a higher likelihood of engaging in tax-sheltering activities and
greater discretionary/permanent book-tax differences. Their study result revealed
the relationship CSR and earnings management.