Out of the Goodness of my Heart: CSR Motivation of Family Firms

Abstract

Do family firms engage in Corporate Social Responsibility (CSR) for symbolic or substantial reasons? Scholars often use a focus on reputation and self-serving behavior as a theoretical explanation for external CSR in family firms and conceptually indicate that CSR is rather symbolic. The substantiveness of CSR is highly important for its impact on society and the firms themselves. We empirically investigate the relationship between family ownership and CSR motivation (substantial versus symbolic) as well as family ownership and CSR orientation (external versus internal CSR). Due to ambiguous results at the family firm-CSR link in previous literature, there is further a need to evaluate family firm heterogeneity: We analyze the link between family generation and CSR orientation. We base our analysis on survey data of 896 Austrian and German firms from 2020. Our work uncovers that family firms rather focus on substantial compared to reputational CSR. This indicates that the need for social ties might be the decisive factor instead of reputation which advances the theoretical concept of socioemotional wealth. We further demonstrate that succeeding generations positively link to CSR orientation, which indicates that the associated SEW dimensions intensify over time. The latter opens an exciting debate with previous research.