Relationship between corporate social responsibility and financial performance: a moderated mediation analysis

Purpose This study aims to examine the effects of corporate social responsibility (CSR) structural properties (CSR vision and strategic plans, codes of ethics and an independent CSR unit) on financial performance (FP), using employee turnover as a mediating variable. It also tests whether employee benefit programs can moderate the effect of CSR on employee turnover. Design/methodology/approach Data were drawn from the Workplace Panel Study, a biannual survey conducted by the Korea Labor Institute since 2005. The four biennial survey cycles generated 7,017 data points, and the data analysis included a 1,719-point (24.5%) unbalanced panel data set that pertained to one of the three CSR items. Findings The results indicate that the unstable CSR−FP link may stem from differences in FP measurement and the inclusion of control variables. In addition, the presence of CSR structures acts as an effective tool for reducing turnover by fostering employee attachment and loyalty to organizations. Furthermore, involuntary turnover shows a negative relationship with FP measures independently, highlighting its detrimental impact on FP. Finally, while CSR has retention benefits, its alignment with employee benefits may unexpectedly increase employee departures. Research limitations/implications Although uniform FP measurement may not be possible, researchers need to take the irregularity of the CSR−FP link into account when interpreting the findings. Originality/value This study contributes to understanding the complex interplay between CSR, turnover and FP, highlighting the nuanced effects of different CSR practices and their implications for FP and employee retention strategies.