JRFM, Vol. 16, Pages 362: Examining the Interactive Effect of Advertising Investment and Corporate Social Responsibility on Financial Performance

JRFM, Vol. 16, Pages 362: Examining the Interactive Effect of Advertising Investment and Corporate Social Responsibility on Financial Performance

Journal of Risk and Financial Management doi: 10.3390/jrfm16080362

Authors: Jen-Sin Lee Xiao-Yan Deng Chih-Hsiung Chang

This article explores the interactive effect of advertising investment and corporate social responsibility (CSR) on financial performance by selecting 2431 listed companies that participated in the professional evaluation of Hexun.com as the research sample, with a total of 12,471 observed values. The panel regression, analysis and hypotheses tests were conducted to examine the interactive effect of advertising investment and CSR on financial performance. There are four empirical findings. First, an advertising investment plays a significant role in improving corporate financial performance. Second, actively fulfilling CSR can effectively upgrade the financial performance of an enterprise. Third, different functional mechanisms will not change the positive impact of CSR on financial performance. Fourth, the interaction between advertising investment and CSR has a significant positive correction on financial performance. Combining the advertising investment with CSR they have a remarkable complementary effect on financial performance. Based on these findings, this article claims that to maximize the advertising effect, company managers should actively carry out business activities and conduct appropriate advertising investments from the perspective of CSR. In other words, to enhance the return on marketing activities and strengthen the promotion of financial performance by advertising investment, company managers should pay more attention to fulfilling CSR and take advantage of the reputational and social images generated by CSR to bring greater market value and financial growth.