The interaction between corporate social
responsibility and value added intellectual
capital: empirical evidence from Turkey
Guler Aras, Asli Aybars and Ozlem Kutlu
Purpose – Corporate social responsibility (CSR) has become one of the mainstream issues for
sustainable corporate performance in recent decades. Engagement in CSR activities has proven to
have certain beneﬁts for companies, ranging from better ﬁnancial performance to shareholder wealth
maximisation. Companies’ value creation process has been dominated by companies’ hidden assets
and concurrently the concept of value added intellectual capital (VAIC). The purpose of this study is to
provide evidence from an emerging market about the interaction between CSR and VAIC, and thus
contribute to the understanding and awareness of the signiﬁcance of socially responsible investments
Design/methodology/approach – The empirical analyses, which take into account VAIC and its
dimensions, are conducted on a sample of manufacturing companies listed on the Istanbul Stock
Exchange (ISE) during the period 2007-2008. It is shown that some causality is related to the existence
of a lag during the periods for the variables CSR and VAIC. Based on previous empirical studies, this
study conducts the analyses based on the assumption that there may be a relationship between ﬁrm
age, ﬁnancial leverage, return on sales and market-to-book ratio and CSR.
Findings – The results fail to provide any signiﬁcant relationship between CSR and VAIC during the
period analysed. These ﬁndings should not overshadow the beneﬁts of CSR, but should be attributed to
the time it takes for these investments to have an impact on ﬁrms’ intellectual capital.
Practical implications – A larger sample of ﬁrms covering a longer time span could be utilised.
Generation of a CSR index in Turkey that eliminates the subjectivity of CSR measurement will
undoubtedly improve the accuracy of the analyses.
Originality/value – This paper increases the understanding of the relationship between corporate
social responsibility and value-added intellectual capital. This research is also the ﬁrst research to have
examined Turkish companies for CSR and VAIC issues.
Keywords Corporate social responsibility, Value added intellectual capital, Emerging markets, Turkey
Paper type Research paper
The emphasis given to corporate social responsibility (CSR) activities has become a
signiﬁcant factor in companies’ agendas during recent decades. Having witnessed various
recent corporate scandals, an increasing number of companies have recognised the need
to adopt policies that focus on ethical, environmental and social conduct and its reporting.
The beneﬁts associated with CSR policies have also attracted the attention of academicians
and practitioners and resulted in a vast amount of empirical study. Most of these studies
focus on the interaction between CSR and ﬁnancial performance; however, no consensus
has been reached as to a result. In their comprehensive study, Margolis and Walsh (2003)
provide an overview of the empirical studies concerning the results of the relationship
between CSR and ﬁnancial performance. They state that a positive interaction has been
observed in 50 per cent of studies, whereas no relationship has been found in 25 per cent of
studies. The remaining 20 per cent and 5 per cent have shown mixed and negative results,
SOCIAL RESPONSIBILITY JOURNAL
VOL. 7 NO. 4 2011, pp. 622-637, Q Emerald Group Publishing Limited, ISSN 1747-1117 DOI 10.1108/17471111111175173
Guler Aras is a Professor in
the Faculty of Economic
Sciences, Yildiz Technical
University, Istanbul, Turkey.
Asli Aybars is a Research
Assistant in the Faculty of
Ozlem Kutlu is a Research
Assistant in the Faculty of
Yildiz Technical University,