The role of corporate social responsibility in the formation of strategic alliances

Abstract

Firms that pursue more corporate social responsibility (CSR) are perceived as operating with more integrity and should thus be more attractive strategic alliance partners. It remains unknown, however, whether this attractiveness actually translates into more new alliances and how the relationship between CSR and alliances differs for different types of CSR. Drawing from signaling theory, we present novel theorizing about the unique signaling properties of the three core dimensions of CSR –– environmental, social, and governance responsibility –– and explain how the salience of any type of CSR as a signal depends on the institutional setting. Relying on 17 years of data spanning 2,291 observations across 354 U.S. firms, we find that environmental and social responsibility have a positive impact on the number of new alliances firms enter, but that governance responsibility has a negative impact. Further, we find that the relationships between alliance formation and environmental and governance responsibility, respectively, are attenuated by the extent to which the respective type of CSR is institutionally prescribed in the organizational field. Our study adds important nuance to knowledge about the signaling properties of CSR and contributes by explaining the impact of various dimensions of CSR on another key strategic activity that firms pursue –– the participation in alliances. We also contribute to understanding of signaling theory by introducing a novel boundary condition that defines the salience of an activity as a signal: institutional norms for the activity.