The effects of corporate social responsibility on firm performance: A stakeholder approach

The primary purpose of this study is to compare the internal and external stakeholder effect of corporate social responsibility (CSR) on a restaurant firm's financial performance. Two financial measures (i.e., return on asset and Tobin's q) were used to capture a firm's short-term profitability and the market's evaluation of a firm's future profitability. The study found that external CSR enhances a firm's market value but is negatively related to operational profitability. Internal CSR increases a firm's operational profitability but has no effect on a firm's market value. This study examines the stakeholder perspective of CSR, considering a variety of performance indicators, to provide a more in-depth understanding of CSR.