Luận án tiến sĩ Quản trị kinh doanh: Investigating the influence of corporate social responsibility practices on business financial performance: a mediation analysis of corporate reputation

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY INTERNATIONAL UNIVERSITY INVESTIGATING THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY PRACTICES ON BUSINESS FINANCIAL PERFORMANCE A MEDIATION ANALYSIS OF CORPORATE REPUTATION A dissertation submitted for the Degree of Doctor of Philosophy in Business Administration By NGUYEN KHOA TRUONG AN PBAIU16001 Supervisors: Assoc. MAI NGOC KHUONG Dr. CAO MINH MAN Ho Chi Minh city, May 2022 ATTESTATION OF AUTHORSHIP Ihereby declare that this dissertation is my own work and that, to the best of my knowledge and belief, it contains no material previously written or published by another party, nor material which to a considerable extent has been submitted for the achievement of any other degree of a university or other institution of higher learning. Nguyen Khoa Truong An Ho Chi Minh City May 2022 Approved by: Supervisors Assoc.

Mai Ngoc Khuong Dr. Cao Minh Man ACKNOWLEDGEMENT First of all, I would like to express my sincere gratitude to my main supervisor Assoc. Mai Ngoc Khuong for his continuous support to my PhD study and research, for his patience, motivation, enthusiasm and immerse knowledge that giving me the valuable opportunity to do research and providing golden guidance through my PhD journey. His vision, sincerity and motivation have deeply inspired me.

He instructed me the method to conduct the research and gave out the research works as clear as possible. It was a great honor to work and study under his guidance. I am extremely grateful to what he has given me, especially the precious guidance helped me in all the time of research and writing of this dissertation. Secondly, I would like to thank my second supervisor Dr.

Cao Minh Man for his support and knowledge he taught me in Advanced Quantitative Research Method class. My PhD fellows and I had a good time in the class. I would also like to thank the rectorate board of Thu Dau Mot University for allowing me to continue my lifelong learning and providing finance assistance during my PhD journey. They gave me a chance to take part in PhD course for my career development.

Finally, there are no words to describe my thanks to my beloved ones. My family, especially my parents, who love me and unconditionally support me in all aspects. A big thank given to my sweet heart who is always patient to me and comforts me all the time. I am extremely grateful to my friends who spent precious time to hang out with me whenever I was in depressed mood for my PhD study.

Without my beloved ones, I could not have gone to this stage. lam so blessed to have full support from my supervisors, my university, my family, my sweet heart and friends. PUBLICATION LIST > List of published journal articles Nguyen, A. Building a Conceptual Framework of Corporate Social Responsibility: An Experience of Qualitative Approach in Vietnam.

Journal of Asia-Pacific Business, 21(1), 39-56. Stakeholders and Corporate Social Responsibility (CSR) programme as key sustainable development strategies to promote corporate reputation—evidence from Vietnam. Cogent Business & Management, 8(1), 1917333. Investigating the relationship between CSR and financial performance based on corporate reputation: evidence from Vietnamese enterprises.

Global Business and Economics Review, 24(2), 107- 127. The impact of corporate social responsibility practices on competitive advantage: Vietnamese evidence. International Journal of Management and Enterprise Development, 20(2), 177-195. The effects of managerial perceptions on CSR practices and corporate financial performance: evidence from Vietnam, Entrepreneurship and Sustainability Issues, 8(2): 858-874.

The impact of legal environment on business success through the practices of corporate social responsibility. Management Science Letters, 10(13), 3033-3040. > List of conference papers Nguyen, K. The determinants of corporate social responsibility practices and the outcomes- A qualitative approach.

Jn the proceedings of the Nida International Business Conference, 2018- Dealing with Disruption Thailand Nguyen, K. Proposing a conceptual framework of corporate social responsibility practices, organizational competitive advantage and business success. In proceedings of UHD-CTU-UEL international economics and business conference 2018, Vietnam Mai, N. The relationship between corporate social responsibility (CSR) practices and employee’s affective organizational commitment in Ho Chi Minh and Binh Duong city, Vietnam- A managerial perspective.

In the proceedings of The 2" International conference on economic, business and tourism, Vietnam Table of Contents ATTESTATION OF AUTHORSHIP. ccscscssssssseseteseeseseseeeeseaeseeeeseseeeeeeesseeeeenaeee ii ACKNOWLEDGEMENTT. 1V LIST OF FIGURES 11101077. x LIST OF TABLUES.

xi LIST OF APPENDICES. - - + tt TT HT HH ngư xi LIST OF ABBREVIATIONS ABSTRACT. 1 In cà 0 CCCAẠIẠIi)iadđaiii.3 Research gap identification. ice s6 + 3v vn ng ng ngư 4 1.4 Research question and research Obj€C(ÏV€S.7 Significance of the rS€arCH.

- - - + tt ng re 15 1.8 The organization of the research. CHAPTER 2: LITERATURE REVIEW AND THEORETICAL RESEARCH FRAMEWORK .2 Grounded theories of the research .1 Stakeholder theory Stakeholder theory and CSR practices .--‹-¿- + k1 HH TH TH HH HH HH re 25 vi Legitimacy theory and CSR praC{IC€S .3 Good management theory and CSR practices .3 Corporate social responsibility .4 Corporate social responsibility practices .1 Economic r€SpOnnSIb1Ï1ẨY. -‹- -- tt vn ng ngư 40 2. eee 6 5+ tt vn nh HH TH 2.

cc ecsssesesesseesscsesereescseeerscseseserscseetecseeeeseseseees OD 2.1 Corporate Social Responsibility and Financial Performance.1 Economic CSR responsibility and financial performance.2 Legal CSR responsibility and financial performance.3 Ethical CSR responsibility and financial performance.4 Environmental CSR responsibility and financial performance .5 Philanthropic CSR responsibility and financial performance .2 Corporate social responsibility and corporate reputation 2.1 Economic CSR responsibility and corporate repufaftion.2 Legal CSR responsibility and corporate reDufa(iOn.3 Ethical CSR responsibility and corporate reputation .4 Environmental CSR responsibility and corporate reputation.5 Philanthropic CSR responsibility and corporate reputation 2.3 Corporate reputation and financial performance.4 CSR practices, financial performance, and the mediating role of corporate l0 ỚỚN":ađd. -- 5 S113 1 1 1 1111 11110110101 TT TH re 78 3.4 Justification for mixed methOds.5 Stage 1: Qualitative research. -á- th n HH HH TH ngư86 3. 6 ch TT TH TT HT Hư 88 3.-- 1 1k1 H11 1 TH TH TH HH it 90 3.3 Participant T€CTUI{ITTI(.

5 SE 2S EE#EEEEEEEEk T111 11 re.5 Qualitative method analysis.6 Stage 2: Quantitative research .2 SUTV€Y ITSITUIN€HIE. 95 Ea ốốốố ốố ốố ố nố ố ố ố.4 The official process of data COlÏ€CtÏOI. CHAPTER 4: RESEARCH FINDINGS. s1 TT HT TT TH HT nàn rrưy 4.2 STAGE 1: Qualitative T€SUÏLS.

6 St tt S net 4.1 General ideas of types of CSR praCtIC€S§.1 Economic CSR responsibility 4.2 Legal CSR responsibility 4.3 Ethical CSR responsibility.4 Environmental CSR responsibi]ity .5 Philanthropic CSR responsibility .2 Theme 1: Financial performance and CSR 4.3 Theme 2: CSR practices and competitive advantage 4.3 STAGE 2: Quantitative results 4.1 Preliminary consideration S(AgG. - - + se vn ng net 115 4.4 Examining the measurement Models .1 Examining reflective mO€]L.-¿-¿- ¿c6 +2 S*S‡E£E+E£k#kEEEkEErkrkrkrkrkree 121 Internal consistency reliability. cece ¿+ ¿+ St 1212k E212 Hy 123 Convergent validity.2 Examining structural mode].-- kề HT 130 San 5. 133 CHAPTER 5: DISCUSSION AND RECOMMENDATIONS.2 Effects of CSR practices on financial performance.3 Effects of CSR practices on corporate reDufafiOH.4 Corporate reputation and financial performance .5 A mediating role of corporate reputation.6 Discussion of theoretical explanatiOn.2 Government impÏiCa(iOI.

- ¿+ + St ng ng ngờ 5.9 Conclusions, limitations and future research. LIST OF FIGURES Figure 1.1 Searching “CSR” keyword according to the region Figure 2.1: Stakeholder model adapted from Donaldson and Preston (1995) .2: Grounded theoretical framework. 0c ceeeeceeeeenee eee eeneneeeeeeen seen32 Figure 2.3: Modified Carroll CSR pyramid. c2 SH SH TH ky 76 Figure 3.1: Research pTOC€SS.

CS SH Tnhh hết86 Figure 3.2: Interviewing pTOC€SS.-- c2 SH nen nh ch.1: Relationship of the themes: CSR and outcomes. SH HT nu nh nh nh kh hết 117 Figure 4.- SH SH Tnhh nhện 118 Figure 4.- ch nh như nh nh chư 119 Figure 4.5 Final PLS-SEM model.1 CSR strategy in the context of development.------<<5+ 154 LIST OF TABLES Tab le 2.1 Summary of theoretical framework.2 Review of Corporate Social Responsibility types.1 Summary of qualitative and quantitative research.2 Interview qu€sfiOnS. cọ SH TT nh nh cty89 Tab le 3.3 Firms’ characteristics Tab le 3.4 Description of responded organizations.- -‹- << eee98 Tab le 4.1 Interviewing questions and eXpecta(IOnS.-c eeeeee eee eeeee eect een eeeeneeeeaeeeeneeees 116 Tab le 4.4 Descriptive Sfa(ISICS. cece eee seo T0 Tab le 4.5 Factor loading IndiCatOTS.‹-- c2 Sky 122 Tab le 4.6 Reliability and validify.

cc nh Tnhh nh hy 123 Tab le 4. cà SE nh nh nh nh rà 125 Tab le 4. eee eeta eet eeeeereeees 126 Tab le 4.9 Structural model Ït.‹ - + c cece cece eee eeeeeeeeeeaeeeeeeaeeseeeeeees 127 Tab le 4.10 Path coefficient and hypothesis testing.-cc--c++ 128 Tab le 4. cecceceseec cece SH SH TH TT nh no khe vy 131 Tab le 4.- c2 2s nh set 133 LIST OF APPENDICES Appendix 1: Summary of key papers about CSR practices and outcomes.

Appendix 2: Summary of CSR and outcomes models.--- ---209 Appendix 3: Summary of modifying Carroll CSR pyramid.- - --‹-210 Appendix 4: Sources of measurement scaÏes.---- << sees211 Appendix 5: CSR questionnaire in Vietnamese.213 Appendix 6: CSR questionnaire in English.------ << << << <<215 Appendix 7: Interviewing DFOtOCOÏ.- c1 Sky nhờn217 Appendix 8: Background of participanfS.‹---- c2 se, 221 Appendix 9: Table of coding 222 Appendix 10: Charts of validity and reliability of the construcfs. --223 Appendix 11: Results of blindfolding technique.-‹------<< << one226 Appendix 12: Final Results of PLS -SEM.----- 2-2 eee +230 Appendix 13: model of EFA and reliability.---- << << << << << << *+238 Appendix 14 Model of blindfolding resulfs.---c⁄ 5⁄2 ‡ c2 <x++239 LIST OF ABBREVIATIONS CSR Corporate social responsibility FDI Foreign direct investment FP Financial performance Corpu Corporate reputation EcoCSR Economic corporate social responsibility LegCSR Legal corporate social responsibility EthcCSR Ethical corporate social responsibility EnviCSR Environmental corporate social responsibility PhilanCSR Philanthropic corporate social responsibility ROA Return on assets ROE Return on equity ROI Return on investment EVA Economic value added COGS Cost of goods sold PLS-SEM Partial least Squares structural equation modelling SEM Structural equation modelling HTMT Heterotrait-Monotrait CFA Confirmatory factor analysis EFA Exploratory Factor Analysis AVE Average variance extracted SMRM Standardized root mean square residua CR Construct reliability xiii ABSTRACT The link between corporate social responsibility (CSR) and financial performance has been researched for many years, however the findings still show the inconsistences of positive, negative or neutral results. CSR has been widely studied in developed countries, and the topic has received interest of research in developing context in recent years. Vietnam is a developing country which has special economic-oriented development.

Due to the diverse business activities of the economy and the issues of sustainable development, Vietnam is a potential land to study the implementation of CSR practices and its outcomes. That is the reason why the dissertation aims to investigate the relationship between five types of corporate social responsibility (economic, legal, ethical, philanthropic and environmental responsibility) and financial performance with a mediation analysis of corporate reputation. The research used a mixed research method in terms of qualitative and quantitative approach to address the relationship. The research findings indicate interesting results.

Most of the effects of CSR practices on corporate reputation and financial performance were significant. There were the effect of economic CSR and philanthropic CSR on financial performance. However, for the CSR effect on corporate reputation, there was only economic CSR that did not positively affect corporate reputation. Regarding to how corporate reputation meditated the relationship between CSR practices and financial performance, the corporate reputation positively mediated the relationship between philanthropic, legal, environmental CSR and financial performance.

Based on the findings, the research hopes to explain how Vietnamese enterprises conduct CSR practices and how these practices contribute to successful financial performance. The research theoretically contributes the CSR phenomenon by enhancing existing research with empirical data collected from Vietnamese enterprises and proposing a conceptual framework. Practical implications were also analysed in order to support managers and government for better decision-making procedures. The research could not avoid limitations due to the issues of generalizability, methodology and research procedures.