Linking social and economic responsibilities and financial performance: The assisting role of innovation for an oil engineering and development company

• Date: 01 July 2019
• DOI: http://doi.org/10.1002/ijfe.1722
• Published date: 01 July 2019
• Author: Zahra Hashemi Oskouei

RESEARCH ARTICLE

Linking social and economic responsibilities and financial

performance: The assisting role of innovation for an oil

engineering and development company

Zahra Hashemi Oskouei

Department of Accounting, East Tehran

Branch, Islamic Azad University, Tehran,

Iran

Correspondence

Zahra Hashemi Oskouei, Department of

Accounting, East Tehran Branch, Islamic

Azad University, Tehran, Iran.

Email: zahra.oskouei@gmail.com

Abstract

Social and economic responsibilities of companies lead to positive and success-

ful financial performance of companies, and they lead to improve the company

ratings and evaluations among consumers. In addition, innovation in products

and the process of management make it competitive, and they considerably

contribute to the growth of the company's performance. Therefore, the present

research aims to study the relationship between the social and economic

responsibilities with the financial performance through relying on the facilitat-

ing role of innovation. To accomplish this, 278 data samples were collected

from the staff working for an oil engineering and development company

(in the period of December 2017 to March 2018) based on a Likert scale ques-

tionnaire. Then the results were analysed using structural equation models

together with Amos24 and SPSS22 software. The results of this study showed

that the impact of economic responsibility on innovation is only positive and

significant and the social responsibility cannot affect innovation changes. Also,

innovation is ineffective in the financial performance of the oil engineering

and development company. Hence, it is essential to use effective polices related

to the companies' economic responsibility necessary for obtaining better long‐

term innovations. Moreover, it is suggested that the managers provide insights

for improving the role of social responsibility in achieving future benefits and

higher financial performances.

KEYWORDS

Economic responsibility, financial performance, innovation, social innovation, social responsibility

1|INTRODUCTION

Because of the increasing development of various

companies and organizations, and also competition,

the organizations think more carefully about their own

organizational benefits and profits (Cegarra‐Navarro,

Reverte, Gómez‐Melero, & Wensley, 2016). Any decisions,

even small decisions, made in each department, may

have direct and indirect effects on the various aspects

of our societies in a gradual manner. They may create a

hierarchy of continuous actions and reactions in all

levels of layers of the society. Therefore, it should be con-

sidered that the actions and behaviour of organizations

could influence the society and such effects, good or

bad, are reflected back to the organizations (Foreign

Affairs, 2015). Given the competitive environment in

Received: 26 February 2018 Revised: 19 December 2018 Accepted: 30 December 2018

DOI: 10.1002/ijfe.1722

Int J Fin Econ. 2019;24:1345–1354. © 2019 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/ijfe 1345