Corporate social responsibility in competitive market and the effects on companies profitability

In recent years, extensive research has explored the relationship between corporate social responsibility (CSR) and its impact on corporate profitability. This study focuses on companies listed on the Tehran Stock Exchange and investigates how CSR activities affect corporate profitability, while also considering the influence of market competition. The study encompasses a total of 155 companies over the period from 2011 to 2021. The findings reveal a significant positive correlation between CSR disclosure and corporate profitability. Companies that actively engage in CSR initiatives and transparently communicate their social responsibilities tend to experience enhanced financial performance. Moreover, the study examines the moderating role of market competition in this relationship. While market competition does not significantly moderate the relationship when profitability is measured by the Tobin's Q metric, it emerges as a moderator when profitability is assessed using the Return on Assets (ROA) metric. In conclusion, this research contributes valuable insights into the intricate relationship between CSR and profitability within companies listed on the Tehran Stock Exchange. These findings have implications for investors, managers, and policymakers, shedding light on the potential for CSR to enhance financial performance. Keywords: Corporate Social Responsibility (CSR), Profitability, Market Competition