The Role of the Institutional Environment in the Relationship between CSR and Operational Performance: An Empirical Study in Korean Manufacturing Industries

Abstract

Few studies have been conducted to explore the role of the institutional environment on the relationship between corporate social responsibility (CSR) and operational performance in Korea’s manufacturing industry. Therefore, this study investigates the moderating effects of four institutional uncertainties—law enforcement, regulatory uncertainty, market turbulence and competition intensity—on the relationship between CSR and operational performance. Empirical survey data from 209 Korean manufacturers was collected online and then analyzed through moderated multiple regression analyses. The results show that CSR can significantly affect operational performance, positively moderated by law enforcement and competition intensity, but not by regulatory uncertainty and market turbulence. These results advise that the different institutional environments in which CSR is implemented are particularly important to consider for optimal business operations.

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