Impact of corporate social responsibility on firm performance in the United Kingdom: A case study of manufacturing companies

Based on the stakeholder theory, firms with CSR focus must balance the interests of multiple stakeholders, and therefore, managers must allocate resources to satisfy both investing and non-investing stakeholders’ interests. Using measures of performance risk taking and a sample of 40 UK firms during 2012 to 2022, we found out that stronger CSR performance is associated with companies' determination to contribute to society at all levels. We examine the mechanism through which CSR has an impact on firm value and find a positive indirect impact of CSR on firm value. CSR performance is positively associated with firm value because CSR makes the shareholders feel involved. The findings of this study hold potential implications for businesses, policymakers, and academics alike, offering insights into how CSR practices can be tailored and optimized to foster positive outcomes in diverse industrial contexts. To address these inquiries, we conducted a comprehensive analysis that encompasses various industries and employed the quantitative methodology. The study delves into the multifaceted aspects of CSR, examining its effects on financial performance, reputation, stakeholder relations, and overall business efficiency. These findings reveal a significant and positive connection between CSR practices and company performance. Companies that actively engage in CSR initiatives tend to exhibit improved financial performance, enhanced reputation, and stronger stakeholder engagement. Moreover, our research demonstrates that CSR contributes positively to business efficiency, fostering sustainable and responsible business practices. The implications of this study extend to businesses, policymakers, and academics, highlighting the strategic importance of CSR as a driver of success and efficiency in contemporary business environments. Our research underscores the need for businesses to integrate CSR into their core strategies and operations, not only for ethical reasons but also to enhance their overall performance and efficiency.