The effect of corporate social responsibility on firm performance: Evidence from Vietnam

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The vitality of corporate social responsibility (CSR) toward sustainability has been rising rapidly in business activities. Good CSR practices are one of the most critical instruments to satisfy stakeholders’ interests and improve business performance. This study explores the nexus between economic, social, and environmental dimensions of CSR and firm performance based on a balanced scorecard. The sample includes 336 Vietnamese enterprises, excluding financial firms. The survey was conducted from March to June 2021. The empirical results of the partial least squares structural equation modeling (PLS-SEM) demonstrate that CSR significantly affects company performance. The economic dimensions of CSR have the strongest impact on financial performance (p < 0.01; t > 2.57; sample mean is 0.362). However, the environmental dimensions of CSR have not been found to influence customer performance. This study also finds that the three dimensions of CSR positively impact learning and growth, which lead to higher internal business processes and then better customer performance, eventually positively influencing profitable results. Consequently, the firm’s leaders should have strategies for effective CSR implementation to increase financial performance and achieve sustainable development goals. Furthermore, the government and other organizations should actively improve legal policies and regulations related to CSR in order to ensure organizational and national sustainability.

Acknowledgment
This study is funded by Funds for Science and Technology Development of the University of Danang under project number B2020-DN07-08.

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    • Figure 1. Conceptual research model
    • Table 1. Measurement scale
    • Table 2. Characteristics of the sample
    • Table 3. Reliability and convergence of the scale
    • Table 4. Discriminant validity test among constructs by the Fornell-Larcker standard
    • Table 5. Hypotheses testing
    • Table A1. Measurement of the study constructs
    • Conceptualization
      Le Ha Nhu Thao, Doan Ngoc Phi Anh, Nguyen Thi Kim Ngoc, Vo Van Cuong
    • Data curation
      Le Ha Nhu Thao, Nguyen Thi Kim Ngoc
    • Formal Analysis
      Le Ha Nhu Thao, Nguyen Thi Kim Ngoc
    • Funding acquisition
      Le Ha Nhu Thao
    • Methodology
      Le Ha Nhu Thao, Doan Ngoc Phi Anh, Vo Van Cuong
    • Project administration
      Le Ha Nhu Thao
    • Writing – original draft
      Le Ha Nhu Thao, Doan Ngoc Phi Anh, Vo Hung Cuong, Nguyen Thi Kim Ngoc, Vo Van Cuong
    • Writing – review & editing
      Le Ha Nhu Thao, Doan Ngoc Phi Anh, Vo Hung Cuong, Nguyen Thi Kim Ngoc, Vo Van Cuong
    • Investigation
      Doan Ngoc Phi Anh, Vo Hung Cuong, Vo Van Cuong
    • Supervision
      Doan Ngoc Phi Anh
    • Validation
      Doan Ngoc Phi Anh, Vo Van Cuong
    • Software
      Vo Hung Cuong
    • Visualization
      Vo Hung Cuong
    • Resources
      Vo Van Cuong