Conformity or differentiation? A U-shaped relationship between peers’ CSR and focal firms’ CSR

Abstract

PurposeThe purpose of this paper is to investigate the influence of peers’ corporate social responsibility (CSR) on focal firms’ CSR from an integrated perspective. The current study aims to explore whether as peers’ CSR increases focal firms’ CSR would first decrease and then increase.Design/methodology/approachThis study is based on a sample consisting of Chinese listed manufacturing firms from 2010 to 2016. Hypotheses are tested by generalized least squares method to minimum heterogeneity and autocorrelation concern.FindingsThe results show that focal firms’ CSR would first decrease and then increase with the increase in peers’ CSR. Furthermore, this paper found that corporate visibility would stress more value on CSR differentiation strategy and environmental uncertainty would stress more value on CSR conformity strategy, such that the U-shaped relationship would be more pronounced in high corporate visibility or low environmental uncertainty situation.Practical implicationsThe findings may be of interest to the academic researchers and managers. For researchers, it is important to understand how focal firms would practice CSR in response to peers’ CSR, especially through an integrated perspective. For managers, the results show that the best way to invest in CSR activities in response to peers’ CSR follows a U-shaped curve, and corporate visibility and environmental uncertainty are important factors to be considered to make CSR decisions.Originality/valueThis study contributes to the literature by proposing and examining a U-shaped relationship between peers’ CSR and focal firms’ CSR, which stresses the conformity and differentiation value of CSR simultaneously. Besides, to fully map the effects of peers’ CSR and focal firms’ CSR, this paper considers the moderating roles of internal and external contingencies on this non-linear relationship between the peers’ CSR and focal firms’ CSR.