Relationships Between Corporate Social Responsibility, and Its Good Governance and Its Stakeholders’ Return: a Case Study of The Companies Listed on The Stock Exchange of Thailand (SET)

Abstract

The objectives of this study are to identify the relationships among corporate social responsibility, good governance, and stakeholders’ return for companies listed on the Stock Exchange of Thailand. Stakeholders were divided into three groups as follows: (1) companies for which returns
were measured using the future return on assets (ROA) and future market value (Tobin’ Q), (2) employees whose returns were measured using future compensation, and (3) shareholders whose returns were measured using return on equity (ROE) and future dividend yield. The business size and length of time as a limited public company and industry were employed as the study’s control factors. The sample group included 1,188 companies. Multiple linear regression analyses were used to test the hypotheses. The findings revealed that companies with social responsibility
were likely to yield good returns for their stakeholders, companies, employees, and shareholders. Regarding the companies, on average, those with social responsibility were likely to yield higher future ROA but lower future market
value (Tobin’s Q) than those without social responsibility. Regarding the employees’ benefits, on average, the companies with social responsibility were likely to provide higher future compensation than those without social responsibility. Regarding the shareholders, on average, the companies with social responsibility were likely to have higher future ROEs and future
dividend yields than those without social responsibility. Therefore, despite higher operating costs, companies with social responsibility were likely to yield better benefits to their stakeholders in the future.