Investigating the Impact of Financial Constraints on Corporate Social Responsibility

Abstract

Corporate social responsibility is intended to reflect the unity of the organization's activities and values in a way that reflects the interests of all stakeholders, including shareholders, customers, employees, investors, and the general public, in the policies and practices of the organization. Being aware of this can play a key role in creating an appropriate process for companies. To this end, this study is trying to examine the impact of financial constraints on corporate social responsibility of 90 companies are members of the Tehran Stock Exchange, which have been determined using a screening method and according to specific criteria by using panel data method in period 2010-2018. The results show that Financial constraint has a significant and negative impact on the social responsibility index. Financing constraints can make a company more financially financed and affect the firm's financial performance and repayment power. Findings indicate that there is a significant positive relationship between the size of the company and financial leverage and corporate social responsibility.