Talking the Walk or Talking the Talk? Institutional Constrains, Aspiration, and CSR Decoupling

Abstract

Firms’ CSR reports may misalign with CSR performance. But less is known about why firms implement CSR decoupling facing tight institutional constrains. From the lens of risk seeking and risk averse argument of the behavior theory of the firm, we construct and test a framework which emphasizes the interaction between institutional pressures and firms’ performance relative to the historical aspiration. We test the framework using Chinese listed firms and find that firms facing tight institutional constrains are less likely to implement CSR decoupling, but the effect is weakened by the distance between performance and historical performance. Our findings not only contribute to institutional theory, the antecedents of CSR decoupling, but may also inspire future research in this field.