The Influence of CSR to Financial Performance in International Engineering Contracting Enterprises: Evidence from China

The purpose of this study is to examine the effect of corporate social responsibility (CSR) on the financial performance of international engineering contracting enterprises (IECEs). The study also explores the mechanisms of CSR influence on financial performance from three perspectives: customer, employee, and corporate, namely the mediating roles of customer satisfaction, employee loyalty, and corporate reputation in the relationship between CSR and financial performance of IECEs. A conceptual model and 10 hypotheses were put forward through the literature review. A total of 355 valid questionnaires were collected using snowball sampling. The proposed research model and its associated hypotheses were tested by using partial least squares structural equation modeling (PLS-SEM). The findings indicate that CSR positively affects financial performance of IECEs. The results also indicate that employee loyalty and corporate reputation can partially mediate the relationship between social responsibility and financial performance of IECEs. A noteworthy finding is the insignificant results of the analysis of customer satisfaction as a mediator. The hypothesis that customer satisfaction plays a mediating role in the relationship between the impact of CSR on financial performance is not supported. This study will provide useful references to help international engineering contractors develop CSR promotion plans, optimize CSR strategies, improve financial performance, and achieve sustainable development.