Corporate Social Responsibility and Firm Performance: The Moderating Role of Reputation and Institutional Investors

  •  Marwan Alshammari    


Drawing on the institutional theory, stakeholder perspective, and ownership literature on corporate social responsibility, this article sheds light on the relationship between the firm social performance and the financial performance of the firm. Singularly, the paper explores a moderating effect of both corporate reputation as a proxy for firm social activities’ publicity and the institutional investors in the firm. The paper proposes that expected positive impact of both reputation and institutional investors on the relationship between CSR and firm performance. Such that, the firm can best benefit from CSR activities when it has a good reputation among major stakeholders. The effect of institutional owners is expected to positively moderate the relationship between CSR activities and firm performance. Overall, the paper suggests that corporate ownership structure, as well as corporate consistent reputation will have influence on the extent to which a firm may benefit from its CSR activities which would open a new avenue for research on governance structure with regard to CSR and firm performance. Implications for both academics and practitioners are discussed and suggestions for future research are provided.

This work is licensed under a Creative Commons Attribution 4.0 License.