The mediating role of corporate governance and corporate image on the CSR-FP link Evidence from a developing country

This study advances research on corporate social responsibility (CSR) through investigating the CSR-firm financial performance (FP) link. It develops a model based on legitimacy and institutional theories and considers two important intervening variables - corporate governance (CG) and corporate image (CI). The CSR practices are supposed to affect the CG codes and principles in different contexts, especially in developing countries. Empirical results, based on a sample of 155 firms in a developing country, support the link between CSR and FP; however, the effect is indirect while CG and CI fully mediate this link. The findings indicate that the CSR engagements help better governance practice and improve CI through establishing good internal controls and monitoring that ultimately enhance FP. The implications are valuable for academics, managers, and policy makers who are interested to measure the impact of intervening variables on the CSR-FP relationship.