Internal capabilities, external cooperation and proactive CSR on financial performance

ABSTRACT

The impact of proactive corporate social responsibility on a firm’s financial performance has received considerable attention. Grounded in the knowledge-based view (KBV), we aimed to examine the importance of the causal combinations of knowledge-acquisition conditions, i.e. internal capabilities and forms of external cooperation (partner and customer), on supporting the engagement of proactive CSR and as complex antecedents of a firm’s financial performance. We empirically analyzed these relationships based on 54 service-sector firms listed in the Stock Exchange of Thailand using fuzzy set qualitative comparative analysis. The data were collected from each firm’s annual and other reports in 2015. Our findings suggest the importance of internal capabilities and forms of external cooperation that simultaneously support the engagement of proactive CSR as an important strategic mechanism for enhancing a firm’s financial performance based on the KBV. Further results indicate that neglecting any of these conditions could lead to low financial performance.

KEYWORDS:

• Knowledge-based view
• internal capabilities
• external cooperation
• proactive CSR
• financial performance
• fuzzy set qualitative analysis

Disclosure statement

No potential conflict of interest was reported by the authors.