THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY AND FIRM VALUE PROTECTION AMONG MULTI NATIONAL COMPANIES

Abstract

The concept of Corporate Social Responsibility (CSR) has been the subject of a great deal of debate in the context of corporate finance in general and its impact on financial performance in particular. Despite the fact that the concept is critically important on a worldwide scale, a great number of businesses have not yet put it into practice because they are uncertain about the impact it will have on their bottom line. Rather than focusing on expanding their client base and maintaining control over their costs, a number of businesses have reduced the concept to the level of just charitable giving and spending. There has been a lot of discussion in recent years on whether or not corporate social responsibility (CSR) efforts boost the value of a firm. There is a possibility, according to the agency hypothesis, that businesses that have robust corporate social responsibility (CSR) activities may have inferior financial performance and decreased commercial value as a result of management's weak project selection. According to the stakeholder hypothesis, businesses that have a proven track record of corporate social responsibility (CSR) efforts tend to do better financially and have a higher overall value. This is due to the fact that these companies place a high value on the advantage they provide to their stakeholders and act appropriately.