The Role of Corporate Social Responsibility in Business Performance: The Moderation Influence of Blockchain Technology

Abstract

Aim/Purpose: The major challenges for firms to initiate corporate social responsibility (CSR) arise from resource constraints, complexity, and uncertainty. Consuming considerable financial and human resources is the main difficulty for smaller firms or those operating in less profitable industries, and the lack of immediate outputs from CSR initiatives poses a challenge for firms in prioritizing and assessing their effectiveness. Background: To better integrate CSR management into overall business strategy and decision-making processes, Blockchain technology (BCT) could potentially offer a feasible and optimal alternative to CSR reports. Methodology: This study uses the fixed effects regression by way of the Least Squares Dummy Variable (LSDV) approach in STATA to analyze the direct effect of CSR management on business performance and the moderating effect of BCT adoption on this relationship with a panel data set of 5810 observations collected from the 874 listed companies in 2015 in Taiwan Stock Exchange through 2021. Contribution: This study contributes to the literature by shedding light on the organizational factors that influence BCT adoption. Findings: The findings show that firms with high levels of CSR management have better business performance. Additionally, the adoption of BCT strengthens the positive relationship between CSR management and business performance, but it cannot replace the fundamental principles of CSR. Finally, firm size does not significantly affect BCT adoption, indicating that companies of all sizes have an equal opportunity to adopt BCT, which can help to level the playing field in terms of resources available to different firms. Recommendations for Practitioners: This study suggests that firms managing CSR practices have better business performance, and the adoption of BCTs further enhances this positive relationship. However, BCT adoption does not have the same positive effect on business performance as CSR practices. Additionally, this research can help to inform public policy related to BCT adoption and diffusion. Recommendation for Researchers: By exploring the factors that influence BCT adoption, future researchers can provide insights into the key challenges and opportunities faced by organizations of different sizes and help to develop strategies for promoting the effective adoption of BCT. Impact on Society: Given the limitations of current CSR reporting, the understanding gained from BCT applications can provide companies with an alternative mechanism to foster progress in CSR implementation. Future Research: Firstly, while the fixed-effects model might have dampened the power of explanation because it only captures within-unit variation and ignores between-unit variation, the explanatory power is further limited due to only integrating two independent variables in this model. Because of limited data availability, this study only utilizes CSR_Report and firm_size as independent variables. Future studies can consider more key factors and may lead to different results. Additionally, panel data is collected from Taiwan and, therefore, may not be representative of the broader population. Future researchers integrating the Stock Exchange of different countries are recommended.