Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model

There is evidence for mixed effects of corporate social responsibility (CSR) on financial performance. In particular, reported to be positive, negative, and insignificant. These controversies are generally explained by two opposing schools thought, which the impact hypothesis shift focus hypothesis. This paper attempts contribute ongoing debate investigating whether relationship between CSR firm results nonlinear. Therefore, this research relies a panel smooth transition regression (PSTR) model in order calculate value threshold 70 Gulf Cooperation Council (GCC) firms from 2015 2020, using composite index various dimensions, include environmental, social, governance dimensions. Empirical findings indicate that investment does not help boost until it exceeds threshold. However, when marginal benefit cost, becomes positive contributor Furthermore, nonlinear persists individual i.e., governmental, environmental measurements. Finally, an interesting finding shows dimension associated with highest level. Hence, should invest more aspects see their profitability increase.