Corporate social responsibility, firm value and life cycle: evidence from Southeast Asian countries

This study extends related research on corporate social responsibility (CSR) into the less-researched realm of Southeast Asia setting by investigating the role of life cycle stages on the relationship between CSR and firm value.

This study uses a sample of 1,247 firm-year observations of firms listed in Southeast Asia from 2012 to 2018. Descriptive, multiple regression and sensitivity analyses are presented in the study.

The results provide evidence that although CSR and firm value, in general, have a positive relationship, the relationship is contingent on the stages of firm's life cycle. The effect of each CSR dimension on firm value differs across life cycle stages. The social dimension of CSR predicts higher firm value at the introduction and mature stages. The governance dimension affects firm value at the growth and shake-out/decline stages. Moreover, the environmental dimension affects firm value only at the later stage of the life cycle.

This study is limited to five countries in Southeast Asia, namely Indonesia, Malaysia, Philippines, Singapore and Thailand from 2012 to 2018. Future studies may explore other countries and investigate the impact of country classification on the relationship between CSR and firm value.

Policymakers, managers and other decision-makers may have a better understanding of firm's behavior in different life cycle stages. With such understanding, CSR will be successfully adopted in decision making, formulation and implementation of policies.

CSR-related research in Southeast Asia remains an under-studied domain, and little attention has been dedicated to different dimensions of CSR and life cycle in the area of CSR-related preference for decision making.