Background to the Study and Overall Research Aim:
CSR is an important issue for companies in this day. In the past, many companies just put their eyes on their profit. They little considered social responsibility. In recently years, some experts point out that CSR can help corporations to make business growth. Within CSR, corporations will put social responsibility in front of making profit. Trough having CSR, they will consider their customers more and therefore, the products, services etc. will be made a lot of improvement. Employees are also more responsible for their customers and the company (Hsu Cindy, 2008). Hence, it has become a strategic issue for the companies and affects them to do business. Many organizations have rebrand CSR into their core value (Sharama S, Sharma J, Devi A, 2009). However, in the other hands, some researches disagreed with CSR and pointed out its disadvantages (corporate watch report, 2006). For example, CSR may cause additional cost to business, and the explicit costs of corporate social responsibly are minimal (Moskowitz, 1972). If CSR can affect a corporation, it can also make impact in industries. Telecommunication industry is a big market in Hong Kong in which the largest teleport in Asia (Boulton, 2001). Some newspaper report had shown that Hong Kong people who own the most mobile phones in the world. According to the Telecommunications Authority announced the latest telecommunications penetration figures, it showed that as of October last year, there were 9.32 million mobile phone users in Hong Kong out of 700 million people. It means that every 100 Hong Kong people will have 133 mobile phones. It seems that Hong Kong people cannot live without telephone or mobile in their life. The overall mobile market grew more quickly from 2011 (Hong Kong Telecommunications Report, 2012). As telecommunication industry is important in Hong Kong, the dissertation topic is focusing to look at this industry from the others, and see the financial performance in each telecommunication company. The research result is important for the management of each company in the telecommunication industry, customers, stakeholders or other industry. The result will affect the management of the company that whether they use CSR as their core value. Changing the management of companies, it needs to imply cost. From the result of the research, the companies can understand the benefit or the consequence of using CSR as their core value so they can consider changing their management method.
This paper tries to find out whether the firm performance of telecom industry in Hong Kong is related to the CSR performance: variables use for firm performance will be ROA, ROE, EPS and variables use for CSR performance will be employees, local communities, product safety, and natural environment.
* The first objective is to define the theory of the relationship of CSR and firm financial performance. * The second objective is to identify variables use to measure CSP and firm performance. * The third objective is to find out the relationship between firm performance and CSR. * The fourth objective is to make recommendation to the whole industry, and make conclusion.
Initial Review of Relevant Literature:
For the relationship between CSR and firm performance, different scholars have their different point of view.
GOSS Allen (2007) conducted a research to find out the relationship with CSR and firm financial performance. There is a relationship between CSR and debt ratio. He pointed out that the firm with low CSR, the firms usually had more debt ratio. If firm has good social responsibility, the debt ratio will be low. He used the method of multivariate analysis and propensity score to conduct the research.
Peters, Richard, M. R. Mullen (2009) pointed out that long run CSR had positive effect for the firm’s stockholders as well as other stakeholders. They used time series data to...
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