The Effect of Technological Posture and Corporate Social Responsibility on Financial Performance Through Corporate Reputation

Maria Isabel González-Ramos, Mario Javier Donate, Fátima Guadamillas

Abstract


This paper analyzes the relationship between the company’s technological posture and its Corporate Social Responsibility (CSR) commitment, as a business performance determinant. From knowledge-based and stakeholders’ theories a structural equations model of relationships was established and statistically tested through SmartPLS on a sample of 76 Spanish firms from the renewable energy sector. The results of the empirical study suggest that the most proactive companies are able to develop better relationships with stakeholders and are more committed to CSR than those firms characterized as followers or innovation last-movers. Two main reasons are offered in this paper to justify these results: (1) CSR practices help companies to retain the most highly qualified employees, which contributes to maintaining their leadership position; and (2) technological leaders tend to be more highly committed to CSR as a way of collecting valuable knowledge that can be useful to explore new opportunities by means of innovation, enabling the firm to respond more flexibly to market changes and new stakeholders’ needs as well as changes in their preferences. Moreover, CSR initiatives will contribute to the development of high-value intangible assets such as corporate reputation, which in turn will improve the firm’s financial performance.


Keywords


Technological posture; Corporate Social Responsibility (CSR); Corporate Reputation; Financial Performance

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DOI: https://doi.org/10.5585/iji.v6i2.244

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