International Journal of Accounting and Management Sciences (IJAMS)
IJAMS Vol.4 No.1 January 2025
DOI https://www.doi.org/10.56830/IJAMS01202502
Authors
Marco Medhat Eleshaa Hanna
Farid Moharam Algarhy
Abstract
This paper investigates the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Sustainability (CFS), with a specific focus on the moderating role of Financial Distress (FD). Employing a quantitative and deductive research design, the study examines data from companies listed on the S&P/EGX ESG Index between 2019 and 2023, a period marked by the COVID-19 pandemic and the Russian Ukrainian war. These crises provided a unique context to explore CSR’s impact on financial sustainability under economic uncertainty, particularly in Egypt, where empirical research on CSR remains sparse. The study evaluates CSR through its Environmental and Social (ES) and Governance (G) dimensions, alongside total ESG scores. Financial sustainability is measured using indicators such as Return on Assets (ROA) and Return on Equity (ROE), while financial distress is quantified using the Altman Z-score. The findings demonstrate that CSR positively influences financial sustainability, particularly in firms with higher environmental and social engagement. Governance practices, though occasionally yielding weaker direct effects, significantly mitigate risks during financial distress. Additionally, the results highlight that CSR serves as a strategic tool for enhancing resilience, stakeholder trust, and long-term financial performance. This research underscores the importance of integrating CSR into corporate strategy to achieve financial sustainability and meet societal expectations. It provides practical recommendations for corporate managers, policymakers, and investors, emphasizing CSR as a dual financial and ethical imperative. The study concludes by identifying future research directions, including sector-specific CSR impacts, longitudinal analysis, and cross-regional comparisons to further enhance the understanding of CSR’s role in corporate financial sustainability.
Keywords: CSR; financial sustainability; financial distress; crisis time; EGX
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