Corporate Social Responsibility Disclosure and Financial Performance: A Bayesian Regression Approach

Abstract

This article examines the influence of corporate social responsibility (CSR) disclosure on the financial performance of companies in Vietnam. This paper establishes a novel connection between non-financial listed firms in Vietnam by employing Bayesian regression analysis based on data from 83 such enterprises. The findings indicate a positive correlation between organizations with elevated CSR disclosure scores (measured by ESG scores) and better financial performance. More precisely, the announcement of corporate social responsibility (CSR) has a strong likelihood of positively affecting the return on assets (ROA) and a similar but less probable impact on the return on equity (ROE) and Tobin's Q. In addition, the findings indicate that the three elements of the environment (E), society (S), and governance (G) equally impact both return on assets (ROA) and return on equity (ROE). Nevertheless, Tobin's Q indicator does not exhibit consistent impacts for each component. In summary, the results of this study indicate that the disclosure of corporate social responsibility (CSR) has a beneficial effect on the financial performance of companies.