The influence of corporate social responsibility practices on organizational performance: evidence from Eco-Responsible Spanish firms

Although corporate social responsibility is a potential driver of a company's organizational performance, previous studies on the relationship between corporate social responsibility and performance have provided conflicting results mainly by two reasons. On the one hand, non-financial outcomes of corporate social responsibility (i.e. corporate reputation, increased employee motivation and customer satisfaction) have been ignored. On the other hand, the potential mediating effect of innovation in the corporate social responsibility-performance relationship has not been taken into account. This study fills in an important gap by analyzing the impact of corporate social responsibility practices on a measure of organizational performance encompassing both financial and non-financial indicators, and by studying the potential mediating role of innovation in the corporate social responsibility-performance relationship. By using the structural equation modelling approach for a sample of 133 Eco-Responsible Spanish companies (mostly, small and medium-sized firms), results provide evidence of positive and significant direct effects of corporate social responsibility on both innovation and organizational performance across all groups of companies (i.e. manufacturing vs non-manufacturing, proactive vs non-proactive, smaller vs larger and younger vs older firms). Results also find a mediation role of innovation for the case of manufacturing companies.