Corporate social responsibility and investment efficiency: The roles of national stakeholder orientation and legal origins

Abstract

Utilizing an international setting consisting of 21,039 observations from 43 countries during the years from 2010 to 2019, spanning the period between the global financial and health crises, we first reveal that the two broad legal traditions of the country shape the positive connection between CSR performance and investment efficiency. We find a stronger positive linkage for companies operating under a civil law regime. Our findings also imply that U.S. firms buck the trend among English common law firms and have probably shifted their orientation to a more balanced consideration of stakeholders. Plus, we discover that legal origins are a stronger predictor of CSR perception by showing that stakeholders of the Scandinavian civil law system are more responsive to CSR activities than those in the German, French, and socialist civil law countries. Results are robust to a battery of sensitivity tests.