Abstract
Social and environmental performance are two pillars of corporate social responsibility that integrate the desires of firms to enhance their competitive advantages and demonstrate their commitment to society. Based on a sample of eight emerging Asian markets, this study investigates the role of firms’ social and environmental performance in their financial performance, and how this may vary under different levels of industry competition. The results show that the social dimension is more effective in increasing firm performance relative to the environmental dimension. Further, the performance of socially oriented firms is more stable in highly competitive industries relative to environmentally oriented firms. Overall, this study supports the view that socially responsible firms have a competitive edge over their rivals that leads to higher profitability.
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•Investigates the role of firms’ social and environmental performance on their financial performance.•Explores the role of industry levels of competition in the mentioned relationship.•We use a sample of firms operating in eight emerging Asian markets.•The social dimension is more effective in increasing firm performance compared to the environmental dimension.•The performance of socially oriented firms is more stable in highly competitive industries.