Corporate Social Responsibility and Company Performance: An Empirical Analysis of Jordanian Companies Listed on Amman Stock Exchange

Purpose: The purpose of this study is to investigate the relationship between Corporate Social Responsibility (CSR) and company’s performance (CP) in Jordanian Companies Listed on ASE.

Place and Duration of Study: The paper was undertaken in emerging economies, 107 companies listed on ASE during the 10-years 2002-2011 were selected as sample for this study.

Design/Methodology/Approach: Data were collected by purposive sampling method, descriptive statistics, regression and correlation analyses were carried out. The techniques that use to analyse the panel data regression models are: fixed effects (FE) and random effects (RE).

Findings: The statistic results reveal that the FE model is more accurate than the RE model since the Hausman test is significant. FE findings showed positive but not significant relationship CSR, accounting-based performance (ROA, ROE, and ROCE), and market-based performance (P/R, EPS, P/V), whilst EPS ratio reported a significant and ROS ratio is a negative relationship. RE model results indicate that there is a negative relationship between CSR, accounting- and market-based company performance (ROA, ROS, P/R, and EPS), thus the Hausman test results reject the null-hypothesis. But, for ROE, ROCE, and P/V as the measures for company’s performance, are a positive since results of the Hausman test is insignificant. This means the most statistically significant results does not statistically validate result lists.

Originality/Value: Our findings will bring contributions toward CSR literatures and any parties will be beneficial and practical useful implications for listed company’s performance in emerging countries.