Analyzing the Effects of Corporate Social Responsibility Level on the Financial Performance of Companies: An Application on BIST Corporate Governance Index Included Companies

Abstract

The aim of this study is to analyze the relationship between corporate social responsibility level and financial performance in a developing country, Turkey. For this purpose, financial data derived from annual reports of the 33 companies included in BIST Corporate Governance Index between years 2006-2012 has been analyzed with panel data analysis. According to the analysis, there is a meaningful and positive relationship between corporate social responsibility and market value/book value ratio, return on equity ratio, return on assets ratio, leverage ratio and net profit. On the other hand, there is no meaningful relation between corporate social responsibility and companies’ total sales and return on sales ratio