Abstract
Core competence is the key factor in the competitiveness of enterprises. This study examines whether enterprises with stronger core competence have the ability and motivation to fulfill more corporate social responsibilities. Taking the non-financial companies listed in the A-share market in China from 2010 to 2019 as the research samples, this paper constructs the measurement index of core competence by text analysis method and empirically tests the impact of core competence on corporate social responsibility. We find that the stronger the core competence is, the higher the corporate social responsibility will be, which means core competence can significantly improve corporate social responsibility. This conclusion remains significant after a series of robustness tests. The mechanism test shows that the impact of core competence on corporate social responsibility is realized by enhancing financial strength and increasing external attention. Further research shows that the relationship between core competence and corporate social responsibility are affected by the nature of the enterprise and the degree of market competition. When the enterprise is a non-state-owned enterprise or the industry competition is more intense, the influence of core competence on corporate social responsibility is stronger. This paper reveals the important impact of core competence on corporate social responsibility, which not only enriches the literature on the economic consequences of core competence and the influencing factors of corporate social responsibility but also has a certain practical significance for how to improve corporate social responsibility.
Highlights
With the proposal of Stakeholder Theory, Corporate Citizenship Theory, and the vigorous development of the global social responsibility movement, the investment and performance in social responsibility have become an important criterion to judge the quality of a company (Lins et al, 2017; Flammer, 2015; Kitzmueller & Shimshack, 2012; Porter & Kramer, 2011)
Taking the non-financial companies listed in the A-share market in China from 2010 to 2019 as the research samples, this paper constructs the measurement index of corporate core competence through text analysis and finds a positive effect of core competence on fulfilling corporate social responsibility
The mechanism test shows that the impact of core competence on corporate social responsibility is realized by enhancing financial strength and increasing external attention
Summary
With the proposal of Stakeholder Theory, Corporate Citizenship Theory, and the vigorous development of the global social responsibility movement, the investment and performance in social responsibility have become an important criterion to judge the quality of a company (Lins et al, 2017; Flammer, 2015; Kitzmueller & Shimshack, 2012; Porter & Kramer, 2011). As the source of sustainable competitive advantage, core competence can provide adequate financial support when enterprises fulfill their social responsibilities (Sun et al, 2021a; Wang et al, 2021a; Sabah et al, 2012) and can enable enterprises to maintain normal operation and development during the lag period of social responsibility activity transforming into financial performance (Li et al, 2018; Li et al, 2020; Servaes & Tamayo, 2013). Enterprises with strong core competence will attract more attention from the outside world Their information communication channels are better, which can guarantee the wide dissemination of corporate information to realize the value creation of social responsibility activities and supervise enterprises to be punished more severely when they evade social responsibility or fail to meet public expectations (Zyglidopoulos et al, 2012; Zhang et al, 2013; Wang et al, 2015). Enterprises with a strong core competence have stronger motivation to fulfill their social responsibilities and eventually, establish a dual image of “strong core competence” and “good sense of responsibility”
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