Corporate Citizens Research Articles

Social Trust, Market Competition, and Tax Avoidance: Evidence from Contemporary China

ABSTRACTFirms pay their fair share of taxes because they want to be perceived as good corporate citizens. However, managers might engage in tax-avoiding activities if such activities are value-maximizing. Using firms in China, this study investigates the relation between social trust and corporate practice of tax avoidance. Results show that firms located in provinces with higher social trust levels engage less in tax-avoiding activities, and the negative relation between social trust and tax avoidance is more pronounced for firms in industries that are less competitive. Since corporate tax avoidance leads to significant loss of tax revenues, tax authorities in China should engage the services of forensic accountants to identify those corporations that practice aggressive tax avoidance. Furthermore, China needs to provide more forensic accounting training for accountants and auditors. Educational institutions need to offer more forensic accounting courses in order to fill the gap between forensic accounting practices and education.

Performing transparency, embracing regulations: corporate framing to mitigate environmental conflicts

ABSTRACT This paper compares two cases of contested mining proposals in the Upper Midwest region of the U.S. to examine how mining companies attempt to respond to opposition and secure regulatory approval . Combining analysis of company documents, regulatory reports, media coverage, and interviews about proposed copper-nickel mining in Minnesota and iron mining in Wisconsin, this paper assesses the discursive framing used by company elites as they seek to mitigate public concerns about environmental risks. We demonstrate how companies use environmental regulations and the scientific information needed for regulatory compliance to circumnavigate environmental conflicts. Specifically, we show how companies characterize their role within the institutional contexts of site fights as that of good corporate citizens, embracing the rigor of the regulatory processes, proposing new technologies to manage environmental risks, and managing the dissemination of scientific knowledge with stakeholders. Rather than taking the bottom-up perspective common to research on site fights, we advance research on elite framing, corporate social responsibility, and expertise by highlighting how companies embrace regulations and perform transparent expertise in attempts to assert legitimacy in contested mining contexts. This paper offers a critical analysis of how elites of capitalism use regulations and voluntary information disclosure, two factors often viewed as antithetical to natural resource development, to attempt to circumnavigate on-the-ground contestation of new projects.

How media coverage of corporate social responsibility and irresponsibility influences cross‐border acquisitions

AbstractResearch SummaryThis study contributes to the growing strategic corporate social responsibility (CSR) literature by examining the intersection of acquisition studies and international expansion research and highlighting the unexplored impact of media coverage of CSR and corporate social irresponsibility (CSI) in shaping completion and duration outcomes of cross‐border acquisitions. A quantitative analysis of 4,087 cross‐border acquisition announcements by firms from Brazil, Russia, India, China, and South Africa (1990–2011) shows that while media coverage of CSR is not important, media coverage of CSI is associated with lower likelihood of and longer duration till acquisition completion. By theoretically and empirically distinguishing media coverage of CSR from CSI, this paper pushes the existing literature to acknowledge these distinct concepts and their varying effects. In sum, managers should beware media coverage of CSI when acquiring abroad.Managerial SummaryCross‐border acquisitions by firms from emerging markets often do not reach completion or are badly delayed, damaging the firms' attempts to expand. A key barrier to completing deals is that employees, customers, regulators, media, and other stakeholders in the target market are suspicious of these firms, fearing that they will be poor corporate citizens. I examine whether media coverage of acquirers' social activities helps overcome these suspicions. I find that media coverage of socially responsible activities does not facilitate deal completion. Strikingly, however, media coverage of irresponsible actions, such as labor or environmental issues, delays or blocks deal completion. The implication is that firms from emerging markets, which increasingly are expanding abroad, need to avoid activities that people outside their country will interpret as inappropriate.

A Systematic Review of Tobacco Industry Tactics in Southeast Asia: Lessons for Other Low- And MiddleIncome Regions.

Background: Transnational tobacco companies (TTCs) have a well-established presence in Southeast Asia and are now targeting other low- and middle-income countries (LMICs), especially Africa. While the tobacco industry’s tactics in Southeast Asia are well documented, no study has systematically reviewed these tactics to inform tobacco control policies and movements in Africa, where the tobacco epidemic is spreading. Methods: We conducted a systematic literature review of articles that describe tobacco industry tactics in Southeast Asia, which includes Singapore, Indonesia, Malaysia, the Philippines, Myanmar, East Timor, Thailand, Cambodia, Vietnam, Laos, and Brunei. After screening 512 articles, we gathered and analysed data from 134 articles which met our final inclusion criteria. Results: Tobacco transnationals gained dominance in Southeast Asian markets by positioning themselves as good corporate citizens with corporate social responsibility (CSR) initiatives, promoting the industry as a pillar of, and partner for, economic growth. Tobacco transnationals also formed strategic sectoral alliances and reinforced their political ties to delay the implementation of regulations and lobby for weaker tobacco control. Where governments resisted the transnationals’ attempts to enter a market, they used litigation and deceptive tactics including smuggling to pressure governments to open markets, and tarnished the reputation of public health organizations. The tobacco industry undermined tobacco advertising, promotion and sponsorship (TAPS) regulations through a broad range of direct and indirect marketing tactics. Conclusion: The experience of Southeast Asia with tobacco transnationals show that, beyond highlighting the public health benefits, underscoring the economic benefits of tobacco control might be a more compelling argument for governments in LMICs to prioritise tobacco control. Given the tobacco industry’s widespread use of litigation, LMICs need more legal support and resources to counter industry litigations. LMICs should also prioritize measures to protect health policy from the vested interests of the tobacco industry, and to close regulatory loopholes in tobacco marketing restrictions.

Diffusion of Innovative Water Atomization Technology to Conserve Water in Water Stress Countries

Clean water is a challenge in water stress semi-arid country like Botswana. All the perennial rivers are shared with river basins of neighbouring countries. Some of the ground water in aquifers are of fossil nature and remain without any recharge. The low rainfall and the increasing temperature increase further the scarcity of water. With the Adaptation at Scale in Semi-Arid Regions (ASSAR), the impact of climate change due to Global warming for Botswana, it is estimated that the Limpopo Catchment (runoff) would decrease 26%, 36%, 46% and 56% under the global warming 1.5° C, 2° C, 2.5° C, and 3° C respectively. Hence water management is imperative in Botswana In managing water, demand management with price and non-price strategies, is the most abundantly used approach. In this respect, a recently emerged strategy is the application of water atomization technology. This research investigates the effectiveness of using water atomization technology at Botho University, as a large size consumer in Botswana and envisage further to scale up to a macro level in Botswana. At Botho University, having studied this as a case study project, it was found that the application of water atomization technology at micro level enables us to save 75% of water that was previously consumed. The installation of technology is a simple process and the payback period is shorter. Further, it was found that the projection for the application of the technology at macro level reflects that there would be a saving of water by 36 million kilolitres. Hence, it was recommended to have a marketing strategy based on principles of persuasion for diffusion of innovative technology to attract adopters, within a budgeted period of ten years. These findings and recommendations are significant not only for micro level application but also macro level application in the country for fulfilling the pledge taken by the country and corporate citizens with SDG 06: Clean Water for all and Sanitation & SDG 12: Responsible Consumption of 2030 Agenda for 17 Sustainable Development Goals(SDGs). However, the study is subject to the limitation that assessing water savings expected from the water technology among various types of customers at macro level is dependent on high resolution water consumption data which is not publicly available.

Addressing the Crisis of the Modern Corporation: The Duty of Societal Responsibility of the Board

A core element of most analyses of how capitalism is failing us is the shareholder primacy doctrine that has taken hold of corporate law and corporate governance. The doctrine has been developed in theory (among others through the agency theory) and practice (e.g. executive remuneration and takeover bids) resulting in the corporation becoming amoral. Any moral responsibility for the effects of one’s behaviour on others has to come from the outside, as an externality. Within the corporation only responsibility to create value for shareholders exists. It is striking to see how this corporate reality created by ourselves seems to have become a reality that is over and beyond us, as a matter-of-fact that cannot be contested, it is simply how it is. Insights of Weber and Fromm show how we have succumbed to self-made formal rationalization and alienation so that we no longer have any responsibility for this corporate reality. This human failure can only be conquered by turning to who we are in the corporate context. Proposals have been made to change this corporate reality, by reducing shareholders’ rights, by installing a broader corporate purpose and by involving other stakeholders in the governance of the corporation. In each of these approaches the role of the board is crucial. Without a board, without the people who make up the board, who commit the corporation to being a responsible citizen in society, nothing much will change. In this paper I argue that in order to generate such a commitment corporate law should introduce a duty of societal responsibility of the board. This involves being responsible for the impact the corporation has on human, social and natural capital, besides financial capital. Corporate law and corporate governance arrangements should elaborate on this duty, by applying principles of fair decision-making and by transforming board decision-making, board composition, organizational governance, executive remuneration and transparency. Such elaborations anchored in the duty of societal responsibility will bring to life a veritable and human commitment from within the corporation to conduct itself as a responsible corporate citizen in society.

Governmentality and Environmental Rights: Regulatory Failure and the Volkswagen Emissions Fraud Case

With the widespread recognition of anthropogenic climate change resulting, in part, from an overreliance on fossil fuels, the reduction in greenhouse gas emissions has become a central problem of government in most Western states. At the level of the individual citizen, the micromanagement of conduct has been established through complex procedures aimed at the rational administration of environmental regulation that intersects with techniques for the administration of ourselves. That is, such an ethopolitics (see Rose 2001) locates questions of government at the level of individual environmental rights, everyday morality, and the ethics of “going green,” as well as at the level of administration, through regulations aimed at reducing car emissions. Concomitantly, the “conduct of conduct” is aimed at corporate citizens that is administered at the level of emission regulatory regimes, as well as through an ethopolitical imaginary of corporate environmental rights and citizenship that is based on, inter alia, fostering environmentally-friendly corporate identities. Drawing on a governmentality analytic, green criminology, and the automobility literatures, we examine how emissions are governed in relation to automobile users and producers. Using the Volkswagen diesel emissions fraud case (also known as “Dieselgate” and “Emissionsgate”), which began in September 2015, as an entry point, this article examines the failure of the Canadian government to monitor and adequately punish emissions violators. This failure takes place against the backdrop of a parliamentary committee proposal to enshrine the right to a healthy environment in Canadian law. Therefore, the article also evaluates the extent to which environmental rights as human rights can refigure existing approaches to environmental violence and challenge the individualization of environmental responsibility and citizenship under neoliberal forms of government.

Extracting transparency: the process of regulating disclosures for the resources industry

PurposeMultinational resource companies (MRCs) are under pressure to become responsible corporate citizens. In particular, stakeholders are demanding more information about the deals these companies negotiate with the host governments of resource-rich nations, and there is general agreement about the need for industry commitment to transparency and the benefits that a mandatory disclosure regime would bring. This paper examines the production of one attempt to regulate disclosures related to payments between MRCs and the governments of nations with resource wealth: Section 1504 of the Dodd–Frank Act.Design/methodology/approachDrawing on Boltanski and Thévenot's (2006) Sociology of Worth, the authors examine the comment letters of participants in this process with a view to revealing how stakeholder groups produce justifications to promote their positions vis-à-vis transparency to regulators.FindingsThe authors show how justifications were mobilised by various constituents in an effort to shape the definition of transparency and the regulatory architecture that governs disclosure practices. In this case, the collective recognition of desirability of transparency enabled the SEC to suture together the views of constituents to create a shared understanding of the role of the common good as it relates to transparency.Originality/valueThis paper explores an alternative approach to the consideration of comment letters advanced during the process of disclosure-related rule-making. The authors show how a sophisticated regulator may be able to draw together elements stemming from different constituents in a way that appeals to a shared sense of the “common good” in order to produce Final Rules.

A Study on the Growth of Almarai as a Corporate Citizen in the era that seeks Sustainable

A Study on the Growth of Almarai as a Corporate Citizen in the era that seeks Sustainable

Internalizing the Corporate Social Responsibility through StrategicOperations Management

Corporate Social Responsibility (CSR) initiatives are usually external activities taken up by corporate organizations to demonstrate their commitment towards social and societal betterment. But it is possible to bring similar results particularly in the domain of environmental safeguard and people welfare by ensuring effective operations management. This internalizing has the benefit of increasing the productivity and quality inside the organization besides serving the cause of social responsibility. Such operations management practices minimizethe damage to the environment, improve the working conditions, conserve the materials and help the organization to become responsible corporate citizen. This paper advocates the need to internalize the CSR initiatives by focusing on operations management and provides the necessary evidence through real life applications. Towards the end the paper also links clean, lean, and green manufacturing to CSR to make the process more attractive to the enterprises.

The Information Mechanism in Corporate Citizenship: Evidence from COVID-19

We explore how information exposure, specifically information transmission within organizations, facilitates companies’ roles as corporate citizens. We study whether US firms’ business networks with China and Italy become their information advantage, and examine whether firms use relevant information to mitigate the negative shocks of COVID-19. We start by validating our measurement of information exposure. Next, we find that a higher number of work-from-home (“WFH”) policies, as evidenced by a higher stay-at-home ratio, are implemented in areas with more information-exposure companies, even before local governments impose a lockdown. To further demonstrate corporate citizenship, we document firms’ positive social externalities — lower COVID-19 growth and an influence on other firms’ WFH policies — and show suggestive evidence on firms’ social motives.

About the Corporate Social Responsibility Beyond the Framework of Charity

The pursuit of sustainable development in the 21st century requires from companies to be good corporate citizens. The practical approach to achieving this is related to integrating the concept of Corporate Social Responsibility (CSR) into the overall corporate strategy. For companies in Bulgaria this is a relatively new practice. The lack of sufficient experience influences the understanding of some businesspersons on the scope of socially responsible behavior and, as a result, in some cases, limits it to charity events. Referring to the results of an empirical study on the carbonated soft drinks market in Bulgaria, this article aims to present CSR beyond the framework of charity. The collected data proves that in this market, both for producers/bottling companies and for consumers, charity is isolated and insufficient manifestation of socially responsible behavior. Recognizing a company as a good corporate citizen on the one hand and exercising such behavior on the other hand requires a much wider form of CSR engagement. The statistical affirmation of the latter assertion suggests that this understanding of the nature of CSR could be also relevant for representatives of the other sectors of the economy in Bulgaria.

Local SOEs’ Performance Metrics of Corporate Social Responsibility and Citizen Perceptions

본 연구에서는 공공기관의 사회적 책임성을 측정하는 지표를 기준으로, 이들 지표가 실제로 사회구성원들에게 가치로서 인정받을 수 있는지, 더 나아가 구성원이 속한 그룹에 따라 인식에 차이가 있는지 분석하고자 하였다. 구체적으로 일반국민 1000명과 146개 지방공기업의 경영평가 담당자 146명을 대상으로, 2018 지방공기업 평가편람 내 사회적 책임성 지표(일자리창출, 일자리 질 개선, 고객 및 주민참여, 윤리경영, 지역사회공헌, 사회적 약자배려, 노사상생, 재난 및 시설안전, 친환경경영)들에 대해 설문한 자료를 바탕으로 하였다. 설문에서는 해당 사회적 책임성 지표들이 현재 상황에 얼마나 필요한지(소망성)를 일반국민과 경영평가 담당자에게 묻고, 경영평가 담당자들을 대상으로는 추가적으로 해당 지표가 얼마나 현실성이 있는지도(이행가능성) 물었다. 전체적인 인식을 파악하기 위해서 질문별 평균 등 기술통계를 이용하였고, 일반국민과 실무자의 평균적인 인식차이의 유무를 파악하는 수단으로서 t-검정(t-test)를 이용하였다. 설문조사 결과, 전반적으로 일반국민에 비해 경영평가 담당자들의 소망성 정도가 낮았고 이행가능성 정도는 그보다도 더 낮았다. 실제 t-검정 결과도 이와 비슷하였다. 소망성에 대한 인식차이는 일자리 창출, 재난 및 시설안전, 친환경 경영부문에서 그 간극이 컸다. 한편 추가적으로 실시한 일반국민의 소망성과 실무자의 이행가능성의 차이를 분석한 결과, 앞선 분석과 일관되게 일자리 창출, 재난 및 시설안전, 친환경 경영부문에서 괴리가 큰 것으로 나타났다. 본 연구는 기존연구들이 관심을 기울이지 않던 사회적 성과를 측정하는 도구에 초점을 맞춤으로써 공공부문의 사회적 책임성 연구에 기여한다.In this study, we examine how citizens perceive the performance metrics of corporate social responsibility currently used to evaluate the performance of local state-owned enterprises (SOEs). Specifically, we surveyed a randomly chosen group of 1000 ordinary citizens to examine how citizens evaluate the desirability of the performance metrics used among the SOEs. We also surveyed the public managers at the SOEs to investigate both desirability and practicability of the metrics. Our findings indicate that the level of desirability measured among public managers is significantly lower than the level measured among ordinary citizens. The level of practicability measured among public managers were even lower than the level of desirability. We also found the discrepancy in terms of the level of desirability between the two groups is large among the following metrics: (1)job creation, (2)safety, and (3)environment. This study is among the first that examines how citizens and public managers perceive the Moon administration’s plan for improving social value among SOEs differently.

Corporate social responsibility and intention to quit

PurposeWhile some work on how employee perceptions of corporate social responsibility (CSR) affect behavioral outcomes has been examined, less work simultaneously investigates whether employee perceptions of internal and external CSR influence the behavioral outcomes of incumbent employees working in organizations. The purpose of this paper is to draw on social exchange theory arguments to investigate the direct and indirect effects of internal and external CSR practices on employee organizational citizenship behavior (OCB) and intention to quit.Design/methodology/approachAn empirical study was conducted among 664 employees working in the banking sector in Kuwait. Structural equation modeling techniques were used to test the suggested hypotheses.FindingsThe results reveal that both internal and external CSR activities are positively related to OCB and OCB is negatively associated with intention to quit. Results also show that distributive justice moderates the relationship between OCB and intention to quit.Practical implicationsThese findings extend the literature on CSR and demonstrate that organizations engaged in CSR activities (internal and external) can enhance citizenship behaviors among employees and thereby increase retention rates.Originality/valueThis research demonstrates the importance of CSR activities in tax-free countries, particularly, in the Gulf Cooperation Council (GCC) region. Since employees in GCC countries are increasingly concerned about the CSR behaviors of organizations, CSR activities can allow local organizations to signal that they are good corporate citizens. Hence, CSR could be considered as a particularly critical source of competitive advantage for businesses in the region.

Corporate Social Responsibility:A Case Study of Vardhman Textiles Limited in India

As a corporate citizen, Vardhman Textiles Limited has built a strong reputation for always fulfilling its social responsibilities and placing immense importance on ethics and good corporate governance. With an aim to leverage resources of big business houses for public good and welfare, Government of India made it mandatory for firms to spend a fixed percentage of their profits on CSR activities by making amendments in the Companies Act in the year 2015. It also mentioned the activities on which the companies shall spend money in order to count their expenditure as a part of CSR expenditure. With regard to new regulatory changes introduced, this case study tries documenting the CSR initiatives undertaken by Vardhman in India and the implications of these activities on General Public. It also tries exploring the perception of various stakeholders in context to company's social responsibility behaviour by conducting field visits to its manufacturing unit in Punjab.

A Study on the Relationship between SLO and the Social Contract Theory in the Context of Business and Human Rights

다국적 기업의 인권 침해를 해결하기 위해 유엔에서 ‘기업과 인권 이행 원칙’ (‘이행원칙’)이 2011년에 발표된 후 여러 국제기구와 국가의 관련 기준이 일관성 있게 수렴되어 이미 중요한 국제기준으로 자리잡았다. 우리나라에서도 이행원칙을 반영한 공공기관의 인권경영 기준이 2018년부터 경영평가에 이미 반영되고 있고 또한 민간기업 확산을 위해 법무부가 마련한 “인권 경영 표준지침” 초안이 2019년 말 현재 공청회 과정을 밟고 있다. 프랑스가 인권실사를 의무화한 기업실사의무법을 2017년 이미 공표하였고 독일에서도 비슷한 법안이 계류중인 국제적 동향에 비추어 한국의 인권경영도 입법을 위한 준비를 하고 있다고 볼 수 있다. 이러한 동향의 이론적 근거로서 근래에 활발히 대두되고 있는 기업운영에 대한 사회적 라이센스 (“SLO”)개념은 기업 활동에 직간접적 영향을 받는 이해관계자가 해당 기업활동의 정당성에 관하여 판단할 권리를 가진 주체로서 논의에 포함되어야 한다는 관점에서 기업의 사회적 책임의 중요한 요소로 대두되고 있다. 그런데 SLO의 보다 구체적인 구성요소와 내용을 파악하기 위한 방법론으로서 사회계약(Social Contract)과의 밀접한 관계가 근래 논의되고 있는데, 이는 노사정 중심의 사회대타협(사회협약)개념을 포함하지만 그보다 더 기저에 있는 시민사회의 토론 및 합의 과정의 관점에서 파악될 수 있다. 즉 SLO는 이해관계자가 크고 작은 범위로 구성하는 사회에서 일어나는 사회계약 프로세스에 참여함으로써 내용파악과 접근이 가능하다는 논지이다. 본 논문에서는 이러한 동향을 각각 소개하고 SLO와 확대된 사회계약의 상관관계를 기업과 인권 논의와 연결 지어 관련 이론의 구조화를 추구한다. 또한 이러한 과정을 한국 대기업에 대한 사회적 책임을 SLO 개념으로 바라보아, 결국 기업과 인권 동향은 기업활동의 정당성과 이해관계자의 사회적 동의를 구하는 방법론으로서 SLO와 확대된 개념의 사회계약의 맥락에서 파악할 것을 제시한다. 특히 사회전반에서 나타나는 반기업정서를 넓은 의미의 이해관계자인 한국사회에서의 인식되는 기업의 SLO의 취약으로 파악함으로써 한국대기업에게는 사회전반과 특정 이해관계자의 두 레벨에서 사회계약 논의에 참여하여 기업의 사회적 책임과 SLO를 강화할 수 있음을 제안하고 그 구체적인 실행의 방법론으로서 이행원칙 인권경영이 제시하는 이해관계자 참여를 통한 인권실사를 충실하게 시행해야 한다는 권고를 함께 제시한다.The concept of Social License to Operate (“SLO”) is getting more attention as a key component of Corporate Social Responsibility in the context of the UN Guiding Principles on Business and Human Rights (“UNGPs”). It provides a new perspective on social concerns associated with corporate activities, similarly as the framework of legal licenses, to contemplate in more concrete terms who and what constitutes the license and the process. Korea has implemented the “business and human rights standard manual” to public institutions in 2018 and a similar guideline for private sector companies is going through public hearings as of 2019, ostensibly in preparation for the legislation in the future. This comes in the backdrop of the ‘French Corporate Duty of Vigilance Law’ promulgated in 2017 and a similar German draft bill surfaced earlier this year. This paper argues that, in order to clarify the content of the SLO, the expanded notion of the social contract provides a conceptual framework where terms of SLO reflect, and are informed by, the ‘terms of the social contract.’ In other words, there is an active process of dialogue between SLO and the social contract where the process of coming to consensus on key issues of the society (social contract process) determines, or at least informs, the terms of SLO. The business and human rights regime, then, is one key component of the social contract “negotiation” and discussion that occurs on various levels of the society and stakeholders. For corporations, SLO represents their participation in the social contract process of the society as a corporate citizen and, on that basis, demonstrates their commitment to becoming part of the solution for harms caused by corporations. Whether solutions are readily found or not, the participation goes a long way to legitimize their effort to fulfill social responsibility. UNGPs provide a methodology to engage in the process from the human rights point of view. Therefore, given this construct, UNGPs offer an opportunity for Korean conglomerates to participate in an active dialogue between SLO and the social contract to improve their weak SLO.

Mapping corporate climate change ethics: Responses among three Danish energy firms

This article develops a mapping tool for how corporations can approach the ethical aspects of climate change based on a literature survey. Literature on this topic tends to focus on the instrumental drivers for businesses, leaving the ethical issues aside. We seek to compensate for this lacuna by suggesting a spectrum of approaches that business corporations adopt in response to climate change, making the ethical orientations explicit. The critical issue of the climate agenda is whether business communities can sufficiently contribute to absolute targets for climate mitigation. In order to avoid charges of greenwashing, business corporations need to be engaged with absolute targets, such as the 1.5 °C target of the Paris Agreement. Moreover, they need to be politically engaged as corporate citizens in order to mitigate climate change in partnership with state and civil society organisations. To provide a test of the proposed mapping tool, we present a case study based on interviews and a survey of sustainability reports (2007–2017) conducted at three Danish energy firms. We conclude that the case study confirms a wide range of corporate responses to climate change, spanning instrumental approaches like the natural-resource-based view, to also include more normative aspirational approaches such as corporate citizenship and political CSR. Furthermore, the mapping tool suggests also including green conservatism and systemic-critical views. Finally, the article discusses how sustainability managers handle the ethical dilemmas of responding to climate change, as well as the limits of the research design, and future prospects and issues raised by the study.

Why Social Responsible Corporations Should Take Tax Seriously

Tax systems biased to powerful and wealthy (corporate) citizens contributed to economic stagnation, increasing inequality of income and wealth, and erosion of social cohesion, democratic legitimacy and public trust. Why and to what extent requires the foundational nature of taxes corporations to see paying a fair share of taxes as one of their main social responsibilities? Corporations bear co-responsibility for a sustainable tax system. Paying taxes is a moral obligation to society. CSR corporations should abstain from minimalist, irresponsible tax behavior since they voluntarily accept ethical obligations that entail going beyond what is required by the law. This regards substantive and procedural (transparency) legal obligations.

Play to Win or Don't Play at All: The Financial Returns to Making the Cut

Despite the proliferation of lists and rankings that recognize firms for superior performance, empirical studies have been limited in their ability to causally evaluate how inclusion for the marginal firm influences shareholder value. Using a regression discontinuity design, we address this limitation by examining how investors responded to firms that were just barely included or excluded from the 100 Best Corporate Citizens list. Contrary to prevailing theoretical expectations, our findings indicate that marginal firms that were included in the ranking experienced negative abnormal returns compared to marginal firms that were excluded. We discuss how these findings inspire future research on rankings and status and highlight implications for managers considering strategic decisions related to pursuing rankings.

The risk of being ranked: Investor response to marginal inclusion on the 100 Best Corporate Citizens list

AbstractResearch SummaryDespite the proliferation of lists and rankings that recognize firms for superior performance, empirical studies have been limited in their ability to causally evaluate how inclusion for the marginal firm influences shareholder value. We address this limitation by examining how investors responded to firms that were barely included or excluded from the 100 Best Corporate Citizens list. Contrary to prevailing theoretical expectations, our findings indicate that marginal firms that were included in the ranking experienced negative abnormal returns compared to marginal firms that were excluded. We discuss the theoretical implications of these findings and how they inspire future research questions for scholarship on rankings and status. We also discuss implications for managers that question whether and when being ranked results in financial benefits or liabilities.Managerial SummaryBecause being ranked is generally seen as an important strategic objective for companies, managers must carefully consider how much attention and resources to allocate toward this pursuit. Although existing research suggests that being ranked can be beneficial, we have a limited understanding about whether barely making a ranked list is worth the effort. We provide new insights for managers by showing that investors not only respond negatively to marginal inclusion on a ranking but also provide suggestions for how companies might counteract this effect. Specifically, our results suggest that making consistent, focused investments that are relevant to external stakeholders may buffer organizations from the potential negative effects of marginal inclusion on a ranking. These insights may also inspire managers to reconsider their firms' commitments to being ranked.