Journal of Risk and Financial Management Article The Impact of Corporate Social Responsibility as a Marketing Investment on Firms’ Performance: A Risk-Oriented Approach Mohamed M. Ibrahim 1, *, Mohamed M. El Frargy 1 and Khaled Hussainey 2   Citation: Ibrahim, Mohamed M., Mohamed M. El Frargy, and Khaled Hussainey. 2021. The Impact of Corporate Social Responsibility as a Marketing Investment on Firms’ Performance: A Risk-Oriented Approach. Journal of Risk and Financial Management 14: 515. https:// doi.org/10.3390/jrfm14110515 Academic Editor: Thanasis Stengos Received: 27 September 2021 Accepted: 25 October 2021 Published: 27 October 2021 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). 1 Department of Marketing, University of MTI, Cairo 12055, Egypt; dr_mohamedelfarargy62@yahoo.com 2 Department of Accounting and Financial Management, University of Portsmouth, Portsmouth PO1 3DE, UK; Khaled.Hussainey@port.ac.uk * Correspondence: Mohamed_mahmoud2k@yahoo.com Abstract: In light of the growing interest in corporate social responsibility (CSR), there is still controversy regarding its impact on firms’ performance. In this paper, we examine the impact of CSR initiatives, as a marketing investment, on firms’ performance. We treat CSR initiatives as investment and, consequently, the returns appear over the long term. We use the stochastic frontier analysis (SFA) approach which is a forward-looking financial market-based metric that captures the firm’s long-term performance. We focus on the banking industry as it confronts a variety compound of risk. We find that CSR implementation is positively reflected in profit efficiency, regardless of the strategic commitment to implementing CSR and bank size, as these variables do not influence the CSR–performance relationship. However, we find that bank age and competitive positioning have a significant impact on the CSR–performance relationship. Our study provides valuable insights to CSR practitioners and researchers, especially in the banking sector. We provide empirical evidence on the importance of CSR and its positive impact on bank performance in Egypt as one of the emerging markets. Keywords: corporate social responsibility; profit efficiency; stochastic frontier analysis; banking sector; Egypt 1. Introduction Several companies have implemented corporate social responsibility (CSR) strategies, which involves adherence to improving community welfare through voluntary business exercises and corporate resource contributions (Kotler and Lee 2005), as well as company policies for the defense of human rights, to strive against corruption, and to achieve transparency in the notification of CSR initiatives (Hategan et al. 2018). CSR is often considered the most efficient way to address social problems (Gatti et al. 2019). It is noteworthy that CSR initiatives use different names, classifications, and def- initions (Sanclemente-Téllez 2017; Vilanova et al. 2009). Accordingly, (Hamidu et al. 2015) suggested several stages. The first refers to volunteering and involvement in social wellbeing. The second is the duration of increasing interest and consciousness of employ- ees’ rights, stakeholder satisfaction, relationship management, organized CSR exercises, and consumer protection. The third is the instrumentality and sustainability duration which deals with CSR as a strategic tool in fulfilling organizational objectives. CSR is robustly institutionalized and standardized presently by various international indicators of accountable investing and sustainability. The literature indicates that CSR provides numerous corporate strategic utilities, which reduce share price and systematic risks (Albuquerque et al. 2019), as well as the cost of funding (Chava and Purnanandam 2010). It increases sales and price premiums (Loose and Remaud 2013), customer motivation and satisfaction (Lacey et al. 2012), the trust in companies’ efforts (Du et al. 2013), and the good image and reputation of firms (Fombrun et al. 2000; Koh et al. 2014; Schnietz and Epstein 2005). Similarly, CSR can J. Risk Financial Manag. 2021, 14, 515. https://doi.org/10.3390/jrfm14110515 https://www.mdpi.com/journal/jrfm