The association between corporate social responsibility index and performance of firms in industrial products and resources industries: empirical evidence from Thailand
Authors: Janamrung Benjamas , Issarawornrawanich Panya 
Published: September 2015

Purpose– This study aims to focus on the industrial products and resources industries due to the environmental impacts caused by both industries. To convince both industries to increase investment in corporate social responsibility (CSR) activities, the authors have presented the results on the relationships between investment in CSR programs and the financial-based and market-based performances.Design/methodology/approach– The study focuses on the data during 2010-2011 of the listed Thai firms in industrial products and resources industries due to the environmental impacts caused by both industries. The findings show that firms receiving a higher CSR index score also have a higher return on assets (ROA), indicating efficient use of the assets. In addition, investment in CSR programs produces a positive outcome within two years, on average, after the investment. As the study period is two years (2010-2011), no relationships are found between the CSR index and return on equity (ROE) and between the index and Tobin’Q.Findings– The findings show that firms with a higher CSR index have higher ROA, thereby indicating a more efficient use of the assets. In addition, the positive outcome of investment in CSR programs can be realized within a relatively short-time period, i.e. two years on average after investment. As the study data cover only two years (2010-2011), no relations are detected between the CSR index and ROE and Tobin’Q.Research limitations/implications– Not many research papers have been studied by using emerging market evidence. The interest in CSR in Thailand is just in its early stage. The study examines the association between multicollinearity by using variance inflation factors (VIF), and it shows no defect on the matter. In addition, the data have been checked for the defects in the outliner, which is very variable. It could be affected to the regression coefficient analysis. The table of casewise diagnostics shows that the outliner containing standard residual diversifies regression equation, and it could also misconceive the variable of Y; therefore, the researcher would exclude the mentioned area before analyzing the data. Durbin–Watson statistic is used to do the error check of ROA, ROE and Tobin’s Q, which were found to be 1.938, 1.817 and 1.931, respectively. The mean varies between 1.5 and 2.5, which means covariance. Additionally, association of independent variable could be checked to ensure that the independent variable has no relationship. It could be noticed from Tolerance and VIF, if Tolerance is close to zero or VIF is over 10.0, it means that one of independent variables has associated with other variables. It implies that there is no multicollinearity problem in this study.Originality/value– This is the first study in Thailand that looks into the effects of CSR activities of industrial products and resources sectors of the industry due to the pollution-prone nature of both industries.