| Abstrakt: |
Objective The geographical conditions of Iran have contributed to the occurrence of diverse natural hazards. Among these hazards, drought emerges as one of the most significant, persisting over the Iranian plateau for several years. This study aims to investigate the moderating role of the phenomenon in the relationship between corporate social responsibility (CSR) and financial performance among listed companies in the Tehran Stock Exchange (TSE). Methods The hypotheses of this study were tested using a sample of 225 companies listed on the Tehran Stock Exchange from 2011 to 2021, employing multivariate regression models. The Standardized Precipitation Index (SPI) was utilized to measure drought in various provinces of Iran, while financial performance was measured using two indicators i.e. return on assets and return on equity. CSR was measured based on the KLD index. Results The findings of this research demonstrated that corporate social responsibility has a positive and significant impact on the financial performance of companies, and drought strengthens this relationship. Conclusion Drought, as one of the main consequences of climate change, is a significant and tangible issue in Iran. Exploring its consequences in the capital market is of considerable importance. The results of this research indicate that the positive impact of corporate social responsibility on financial performance is more pronounced among companies affected by drought. The moderating role of this variable in the relationship between CSR and financial performance has not been extensively studied in the domestic and international literature. Therefore, this study contributes significantly to the extant literature, providing valuable insights for various stakeholders. The obtained results suggest that companies operating in drought-affected regions, facing unique challenges and severe risks associated with water scarcity, resource depletion, and environmental degradation, attempt to mitigate the adverse effects of drought on their operations effectively. By engaging in CSR activities that address specific issues such as water conservation initiatives, sustainable resource management, and community support programs, these companies strive to reduce the formation of a negative perception (stemming from drought conditions) by stakeholders regarding their performance. This strategy, embraced by companies grappling with drought, could amplify the influence of corporate social responsibility on the financial performance of drought-affected businesses, particularly those striving to bolster environmental and social sustainability while fortifying their adaptability and resilience in the face of demanding climate conditions. The research findings provide valuable insights for investors and financial analysts in evaluating the relationship between corporate social responsibility and financial performance, especially in drought-affected regions. They indicate that companies with strong corporate social responsibility exhibit better financial performance, and this positive relationship is even more pronounced when facing challenges arising from drought. These results can help investors and analysts make informed investment decisions. [ABSTRACT FROM AUTHOR] |
