Geographic location and corporate social responsibility: urban versus non-urban firms

Abstract

ABSTRACT This paper examines whether and how firm headquarters location affects corporate social responsibility (CSR) performance. Utilizing a propensity-score matched sample, we find that comparing to their urban counterparts, non-urban firms are less likely to spend resources on CSR programmes while exhibit a similar degree of socially irresponsible behaviour, resulting in a lower overall CSR score. Further analysis indicates that the availability of financial resources, public monitoring, and social capital mediate the relationship between firm location and CSR performance. Our research adds to the debate on CSR impetus by lending support to the economic incentive of CSR engagement and provides evidence of the social impact of location of corporate headquarters.