Political connections and corporate social responsibility reporting in Portugal

Abstract

PurposeThis paper aims to examine the relation between firms’ political connections and corporate social responsibility (CSR) reporting in Portugal. The authors argue that in settings where the existence of political connections are viewed as damaging collective interests of stakeholders, political connected firms can deal with legitimacy issues from such connections by resorting to CSR practices and the reporting thereof.Design/methodology/approachUsing archival data from a panel sample of 36 firms from Portugal between 2009 and 2012, the authors examine the relationship between political connections and CSR reporting by way of regression analysis.FindingsThe authors find a positive relationship between political connections and CSR reporting.Originality/valueThis study draws on legitimacy theory to highlight that CSR can be used to deal with stakeholder activism and vigilance pertaining to suspicion related to the existence of political connections.