Corporate Corporate Social Responsibility Research Articles

Corporate social responsibility and labor investment efficiency: evidence from China

PurposeWe expect to provide a complete theoretical framework and large sample evidence on the impact of corporate social responsibility (CSR) on the efficiency of labor investment. We also hope to provide micro-evidence based on labor investment behavior for the two-sided impact of corporate CSR behavior.Design/methodology/approachThis paper measures labor investment efficiency by estimating the difference between actual and expected net hiring of enterprises. CSR is measured on the basis of the CSR score of Chinese listed companies published by Hexun.com. A regression model is constructed to analyze the relationship between CSR and labor investment efficiency. Possible endogeneity problems are controlled by lagging independent variables, propensity score matching method and difference-in-difference method.FindingsResults show that CSR can improve labor investment efficiency by reducing over-hiring and under-hiring in emerging markets. The existence of the mediating effect of agency cost, information disclosure quality and employment fluctuation confirms that CSR improves labor investment efficiency through two mechanisms of corporate governance and labor market friction. The improvement effect of CSR on labor investment efficiency is more significant in non-state-owned, high CEO shareholding ratio and high-average urban wage enterprises.Originality/valueIn conclusion, our study is an important supplement to the existing research on the factors affecting labor investment efficiency. Our research conclusions will be helpful for enterprises in developing countries or enterprises in labor-intensive industries to improve labor investment inefficiency. The conclusion of the mechanism analysis in this paper provides more complete and reliable microscopic evidence for accurately identifying the specific path of CSR's impact on labor investment efficiency. This paper verifies the positive impact of CSR from the perspective of labor investment efficiency in the context of a developing country, which provides evidence for the theoretical conflicts related to CSR based on the effectiveness of enterprise labor investment decisions.

The peer effects of corporate social responsibility in China: A pre-registered report

In recent years, businesses worldwide have shown a growing interest in adopting corporate social responsibility (CSR) practices. The driver of corporate CSR engagement has attracted widespread attention. This study seeks to examine how firms react to the CSR practices of their peers in China. The ordinary least square would be used to validate our hypothesis and the instrumental variable approach would be utilized to alleviate endogeneity threats. In addition, we propose two channels, named as market competition hypothesis and institutional pressure hypothesis to account for this peer effect. We plan to provide some empirical evidence to support both channels.

Meeting Stakeholder Needs: Who Should Managers Pay Close Attention To? Evidence from Listed Chinese Manufacturing Companies

Meeting Stakeholder Needs: Who Should Managers Pay Close Attention To? Evidence from Listed Chinese Manufacturing Companies

Market penalty, collective punishment, and buffering: A study on the insurance‐like effect of CSR in environmental violations

AbstractWhile the existing literature finds that corporate social responsibility (CSR) can provide insurance‐like protection in negative events, it remains unclear how CSR buffers firms from market penalties for negative events. To address this concern, we conduct event studies and regressions using data from the environmental violations by Chinese publicly traded companies and their interlocked companies from 2009 to 2021. Our results show that the market reacts negatively to environmental violations. The market penalty diffuses through director networks and leads to the collective punishment of interlocked firms. CSR has an insurance‐like effect that buffers market penalties and collective punishment for environmental violations. Long‐term CSR has a stronger insurance‐like effect than short‐term CSR. Additionally, the insurance‐like effect of CSR still exists during repeated environmental violation events. This paper contributes to the literature on the insurance‐like effect of CSR and provides a reference for corporate CSR practice and investors' CSR decisions.

Too much of a good thing: the dual effect of executive equity incentives on corporate social responsibility performance

PurposeResearch on the effect of executive equity incentives is equivocal. Based on agency theory, some scholars take the convergence of interest logic to highlight the benefits of executive equity incentives. In contrast, others adopt the entrenchment logic to emphasize the increased agency costs. This study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil how executive equity incentives impact corporate social responsibility (CSR) performance.Design/methodology/approachUsing the panel dataset of Chinese A-share listed firms from 2006 to 2022, this study integrates the convergence of interest and entrenchment logic to examine how executive equity incentives affect CSR performance.FindingsWe find that the relationship between executive equity incentives and CSR performance follows an inverted U-shaped form. According to the convergence of interest logic, executive equity incentives reduce agency costs when allocating resources to engage in CSR activities and enable firms to increase their CSR investments, ultimately realizing increased CSR performance. After a threshold, however, the accumulation of extensive equity incentives causes the entrenchment effect, resulting in declined CSR performance. Our empirical results also shed new light on its contingent perspective – the inverted U-shaped relationship is attenuated when firms’ stock liquidity is high.Originality/valueThis study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil the inverted U-shaped relationship between executive equity incentives and CSR performance. Our study opens promising avenues for further research on corporate governance and CSR strategies.

Corporate governance and CSR for sustainability in Oil and Gas: Trends, challenges, and best practices: A review

Corporate governance and Corporate Social Responsibility (CSR) are integral components of sustainability in the oil and gas industry, shaping the sector's environmental and social impact. This review explores current trends, challenges, and best practices in corporate governance and CSR for sustainability within the oil and gas sector. The review examines how corporate governance frameworks influence CSR strategies, highlighting the importance of board oversight and stakeholder engagement in driving sustainable practices. It also delves into the evolving role of oil and gas companies in addressing environmental concerns, such as climate change and resource depletion, through CSR initiatives and transparent reporting. Challenges faced by the industry, such as regulatory complexity, stakeholder expectations, and balancing short-term profitability with long-term sustainability, are analyzed. The review underscores the need for robust governance structures and effective CSR programs to navigate these challenges and maintain social license to operate. Best practices in corporate governance and CSR are explored, emphasizing the importance of integrating sustainability into core business strategies. Case studies illustrate successful approaches to CSR implementation, showcasing how companies can create shared value for stakeholders while driving positive environmental and social outcomes. In conclusion, the review calls for a proactive and holistic approach to corporate governance and CSR in the oil and gas industry. It advocates for increased transparency, stakeholder engagement, and alignment of CSR efforts with the Sustainable Development Goals (SDGs) to enhance sustainability and mitigate risks in the sector.

Digital transformation and governance heterogeneity as determinants of CSR disclosure: insights from Chinese A-share companies

Purpose In this fast-changing world, digitization has become crucial to organizations, allowing decision-makers to alter corporate processes. Companies with a higher corporate social responsibility (CSR) level not only help encourage employees to focus on their goals, but they also show that they take their social responsibility seriously, which is increasingly important in today’s digital economy. So, this study aims to examine the relationship between digital transformation and CSR disclosure of Chinese A-share companies. Furthermore, this research investigates the moderating impact of governance heterogeneity, including CEO power and corporate internal control (INT) mechanisms. Design/methodology/approach This study used fixed effect estimation with robust standard errors to examine the relationship between digital transformation and CSR disclosure and the moderating effect of governance heterogeneity among Chinese A-share companies from 2010 to 2020. The whole sample consists of 17,266 firms, including 5,038 state-owned enterprise (SOE) company records and 12,228 non-SOE records. The whole sample data is collected from the China Stock Market and Accounting Research, the Chinese Research Data Services and the WIND databases. Findings The regression results lead us to three conclusions after classifying the sample into non-SOE and SOE groups. First, Chinese A-share businesses with greater levels of digitalization have lower CSR disclosures. Both SOE and non-SOE are consistent with these findings. Second, increasing CEO authority creates a more centralized company decision-making structure (Breuer et al., 2022; Freire, 2019), which improves the negative association between digitalization and CSR disclosure. These conclusions, however, also apply to non-SOE. Finally, INT reinforces the association between corporate digitization and CSR disclosure, which is especially obvious in SOEs. These findings are robust to alternative HEXUN CSR disclosure index. Heterogeneity analysis shows that the negative relationship between corporate digitalization and CSR disclosures is more pronounced in bigger, highly levered and highly financialized firms. Originality/value Digitalization and CSR disclosure are well studied, but few have examined their interactions from a governance heterogeneity perspective in China. Practitioners and policymakers may use these insights to help business owners implement suitable digital policies for firm development from diverse business perspectives.

The Influence of Organizational Climate and Market Orientation on Business Performance with Financial Literacy and Csr as Mediation in MSMES in Malang City

Purpose: This study aims to describe the effect of organizational climate and market orientation on the performance of MSME businesses. Theoretical framework: In addition to financial literacy and corporate social responsibility (CSR) activities provided by the company seen as a mediating variable that has a significant effect on the previous relationship. Design/methodology/approach: This study uses a quantitative approach and to business people in the souvenir center in the Greater Malang area as many as 102 samples. Path data analysis is used with the help of Smart PLS. Findings: The results of research on organizational climate and market orientation are important drivers in improving MSME business performance. Furthermore, mediation through financial literacy and corporate CSR supports a significant relationship between organizational climate and market orientation towards improving their business performance. Research, Practical & Social implications: Organizational climate and market orientation are good variables and are a driving force for improving the performance of MSME businesses. Originality/value: This research is original. Carried out in Indonesia for MSMEs that are developing their business with a more modern pattern to achieve maximum performance through an organizational climate and market orientation supported by good financial literacy.

Islamic Corporate Social Responsibility: CSR Practices by Islamic Microfinance Institutions in Lampung

Purpose: This article describes the practice of corporate social responsibility (CSR) adopted by Baitul Maal Wa Tamwil (BMT) in Lampung. This study also examines the literature on different views of CSR and how CSR can be rooted in organizational strategy so that it becomes an organizational competitive advantage. Methodology: A descriptive qualitative method was used in this study, in which the researchers conducted in-depth interviews with both BMT employees and beneficiary communities. Findings: This study found that Baitul Maal Wa Tamwil, which became the locus of research, namely BMT Assyafiiyah Berkah Nasional carries out CSR corporate social responsibility in several forms of programs both physical, facilitating and empowering in nature. The physical form is carried out by providing assistance for the construction of places of worship, Islamic boarding schools, the construction of drilled wells and a program to renovate livable houses. The form of facilitation is carried out by providing compensation, giving OTP (Sponsoring Parents), giving TPA incentives, community service cars and productive forms by giving rolling goats and providing business capital with a qordul hasan contract. This study recommends the need to increase the involvement of baitul maal wattamwil in the process of economic development in general, because the practice of corporate social responsibility will contribute not only to increasing the company's competitive advantage but also to increasing community empowerment. For the company, CSR will also ensure the company's sustainable growth due to improved image and increased customers leading to increased profitability.

Impact of Mandatory Corporate Social Responsibility on Beneficiary Institutions Satisfaction in Nepal

Corporate Social Responsibility (CSR) became mandatory legislation since 2016/17, in Nepal. The aim of this study is to determine the beneficiary institutions satisfaction from the companies CSR activities in Nepal. Descriptive and causal comparative research design was applied. For that, structured questionnaires were used among 400 registered beneficiary institutions. Mean, standard deviation, correlation and regression analysis were performed by using IBM SPSS 25 version software. The results of this study showed a significant positive correlation between corporate CSR initiatives and the satisfaction of beneficiary institutions in Nepal. Out of eight parameters, three variables make a statistically positively significant contribution (p-value<0.05) in beneficiary institutions satisfaction. The concern variables are company routinely visits the community through different CSR projects (BEN-CV). In case of any tear, wear, or depreciation in the community, assure the local company of their involvement (BEN-CI) and, companies conduct CSR programs for the uplifting community, from problems to prosperity (BEN-PP), whose beta value are 0.178, 0.171, and 0.373 respectively. Moreover, these days companies CSR program is more effective to the beneficiaries that play a meaningful role in society for nation’s sustainable development.

Board of directors, COVID-19, and corporate social responsibility monetary performance: direct and interaction effects analysis

Purpose This study aims to provide archival evidence on the impact of board characteristics on corporate social responsibility (CSR) monetary performance and how they interact with the COVID-19 pandemic in the context of CSR monetary performance. Design/methodology/approach This study analyzes listed companies in Oman’s capital market from 2016 to 2021, using pooled ordinary least squares and unique CSR performance measures such as budgeting and spending. Findings The study finds that companies with more expertise and frequent meetings are more likely to allocate a larger budget for CSR activities. However, this does not apply to larger boards or to independent directors. During the COVID-19 pandemic, the effect of independent directors on CSR budgeting and spending is more pronounced, and boards with more expertise and meetings show a negative interaction with the pandemic. The interaction of board characteristics with COVID-19 in terms of CSR monetary performance varies depending on company size. Board independence and expertise show a significant reaction to COVID-19 infection and death cases when setting CSR budgeting and spending. Research limitations/implications The findings of this study are stimulating, but stem from an emerging country with unique cultural and institutional characteristics. Methodological issues were also encountered during the analysis, so readers should exercise caution when applying the results to other settings. Practical implications This study highlights board involvement in deciding a company’s CSR investment, as it was believed that chief executive officers are considered responsible for CSR activities. Additionally, this research underscores the significance of incorporating the financial aspects of CSR into reporting. Originality/value This study examines the seldom explored relationship between corporate boards and CSR monetary aspects during regular and irregular times, offering theoretical and practical insights that benefit multiple stakeholders.

The Association of Board Characteristics and Corporate Social Responsibility Disclosure Quality: Empirical Evidence from Pakistan

Earlier research has shown that the makeup of the corporate board is a crucial predictor in meeting stakeholder accountability expectations through voluntary Corporate Social Responsibility (CSR) disclosure. Though scholars have identified substantial relationships between board composition and CSR disclosure, the majority of their focus has been on the ‘quantity’ of CSR disclosure rather than the ‘quality’. Therefore, the present study considers the association of board characteristics (such as gender diversity, independence, female chairperson or/and female CEO, and board size) and the quality of CSR disclosure of the top 100 Pakistan Stock Exchange (PSX)-listed companies. We conducted content analysis of secondary Corporate Governance (CG) and CSR data extracted from the annual reports of PSX-listed companies across ten industrial sectors from the period 2017 to 2018. Our empirical investigation through univariate and multiple regression analysis with ordinary least squares (OLS) techniques revealed that all the board characteristics potentially had a significant association to lower CSR disclosure quality. Using the 2SLS regression model, we addressed the endogeneity issue of board characteristics and found robust results. One of the important implications of our findings is that policymakers and regulators in developing countries like Pakistan should review the value of board qualities as outlined in CG principles and develop stronger mechanisms to improve numbers of female directors and nonexecutive directors’ independence. We acknowledge several research limitations, including the study time period and selected board characteristics. While our study has provided some understanding of the association of board characteristics with CSR disclosure quality of PSX-listed companies, several research gaps still need to be addressed. Future investigators should examine this association through the pre-COVID-19 and post-COVID-19 contexts and the inclusion of a systems theory perspective.

Economic policy uncertainty and corporate social responsibility disclosure similarity: Evidence from China

This study investigates how economic policy uncertainty affects within-firm corporate social responsibility (CSR) disclosure over time. Based on the institutional perspective, we propose that facing higher economic policy uncertainty, firms likely issue CSR reports that are similar to their own past reports (i.e. CSR time-series disclosure similarity), reflecting symbolic actions in corporate CSR disclosure. Further, this effect weakens for firms with state ownership but strengthens when those with financial constraints or experience net losses. Empirical results derived from a sample of Chinese listed firms from 2009 to 2021 offer strong support for our hypotheses. Overall, our study contributes to the literature on CSR disclosure and research on the consequences of economic policy uncertainty.

The Use of Management Control System in Corporate Social Responsibility (CSR) Strategy Implementation and CSR Activities on Sustainability Reporting

Objective: This study aims to investigate the impact of the relationship between CSR activities and the strategies employed to ensure their proper management in line with company objectives. Global surveys consistently rank the mining, gas and other sectors at the bottom of all sectors in terms of social and environmental performance. Therefore, companies in these sectors have no choice but to change their approach through a comprehensive understanding of their business impacts.
 
 Methodology: The method used in this study is purposive sampling, where the sample criteria include companies featured in sustainability reports, as well as companies that have incurred environmental costs in the form of environmental development program costs.
 
 Result and Conclusion: The study found that the strength of a company's management control system (MCS) plays a significant role in moderating the relationship between CSR activities and sustainable reporting. When the t-value is greater than 2.055 and the significance level (sig) is less than 0.05, the MCS variable acts as a moderator, indicating that a strong control system reinforces the relationship between CSR activities and sustainable reporting. Conversely, when the MCS is weak, the relationship between CSR strategy and sustainability reporting is also weakened.

Subjective perception of economic policy uncertainty and corporate social responsibility: Evidence from China

While existing literature explores factors affecting corporate social responsibility (CSR) from various perspectives, the role of economic policy uncertainty perception has never been studied to our knowledge. In this paper, we study the effect of Chinese firms' subjective perception of economic policy uncertainty (SEPU) on their CSR engagement. Our model proves that SEPU reduces the benefits of maintaining relationships between shareholders and stakeholders, thus decreases corporate CSR engagement. This negative relationship is more pronounced for firms that are highly influenced by the government. We empirically examine these two predictions using the sample of Chinese A-share listed companies. We address endogenous concerns by using the US-China trade war as an exogenous uncertainty shock, and including a Bartik instrumental variable.

Corporate headquarters relocation and CSR performance

This study examines the relationship between corporate headquarters relocation decisions and corporate social responsibility (CSR). If the cost-savings motive is the primary force behind the relocation decision, we would expect to observe a reduction in CSR commitments of relocating firms. Our results fail to provide support for the occurrence of such a reduction, even when the move affords the firm an opportunity to do so. Following a move, firms do not reduce their CSR commitments. On the contrary, the average firm tends to significantly improve its CSR scores in the “environment” and “overall” categories. Our findings hold even after accounting for fixed effects, control variables, and addressing issues of heterogeneity and endogeneity. In investigating the driver of this outcome, we find that the local political environment of the new headquarters location plays an important role. In particular, a stronger tendency to increase CSR activities is mostly associated with relocations to a Democratic rather than a Republican state.

An application of artificial neural networks in corporate social responsibility decision making

SummaryNeural networks in deep learning are changing the way we interact with the world. This paper focuses on building a logit artificial neural network (ANN) and through it finds out the factors affecting the decision to join corporate social responsibility (CSR) of firms. This study contributes to suggesting new directions for research in the artificial intelligence (AI) era on the relationship between corporate governance and CSR. The dataset of 817 Taiwanese electronic firms is analyzed for the period 2014–2020. The empirical results show that when the power of the board of directors, supervisors, and CEOs are higher, firms do not choose to participate in CSR. The independent board has not yet promoted its corporate oversight of CSR participation. The decision not to participate in CSR of the firms is made when they are more equipped with the background of accounting, finance, and law. Only firms with higher debt, asset value, and profitability are willing to join CSR. These research results suggest some important points for future policy reforms towards sustainability.

Shareholder primacy or stakeholder pluralism? Environmental shareholder proposals and board responses

PurposeThis study examines shareholder and board motivations regarding corporate social responsibility (CSR) to understand boards' stewardship approaches to environmental issues.Design/methodology/approachUsing content analysis, the authors classify CSR motivations in all environmental shareholder proposals and board responses of Fortune 250 companies from 2013 to 2017 from do little (a shareholder primacy perspective) to do much (a stakeholder pluralism perspective). The authors calculate the motivational dissonance for each proposal-response pair (the Talk Gap) and use cluster analysis to observe evidence of board stewardship and subsequent environmental disclosure and performance (ED&P) changes.FindingsBoard interpretations of stewardship are not uniform, and they regularly extend to stakeholders beyond shareholders, most frequently including profit-oriented stakeholders (e.g. employees and customers). ED&P changes are highest when shareholders narrowly lead boards in CSR motivation and either request both action and information or information only. The authors observe weaker ED&P changes when shareholders request action and the dissonance between shareholders and boards is larger. When shareholders are motivated to do little for CSR, ED&P changes are weak, even when boards express more pluralistic motivations.Research limitations/implicationsThe results show the important role that boards play in CSR and may aid activist shareholders in determining how best to generate change in corporate CSR actions.Originality/valueThis study provides the first evidence of board stewardship at the proposal-response level. It measures shareholder and board CSR motivations, introduces the Talk Gap, and examines relationships among proposal characteristics, the Talk Gap, and subsequent ED&P change to better understand board stewardship of environmental issues.

The Role of Corporate Social Responsibility in the Sustainability of Tourism Village

The COVID-19 pandemic that has hit the world has an impact on health and other sectors such as education, social culture and the global economy. Tourism, which is used as the locomotive of economic development, is the sector that is most affected, especially in Badung district because it sees people's livelihoods depending on the tourism sector. To improve the economy, the government has made efforts to deal with the phenomena that occur due to the impact of the Covid 19 virus, including by encouraging and motivating state-owned companies (BUMN) to continue to contribute to improving the welfare of the community by remaining consistent and sustainable in implementing Corporate Social Responsibility (CSR) programs. To correlate the phenomena that occur, especially in the field of funding and assistance through CSR in the tourist village area, and companies in the concept of Community Based Tourism (CBT) and also to grow the community's desire for entrepreneurship in relation to supporting the needs of tourists with a target towards sustainable tourism villages. This paper analyzes the implementation of corporate CSR in the development of sustainable tourism villages in Badung district by upholding the principles of corporate social responsibility (CSR). The analysis was carried out using mixed methods, namely measuring quantitatively and strengthening the measurement results by sharpening the results with qualitative methods in developing and sustainability tourist villages in Badung regency.

Communication aimed at engendering trustworthiness: An analysis of CSR messages on Twitter

AbstractA growing body of research is exploring corporate communication in relation to corporate social responsibility (CSR) activities on social media (SM). Nonetheless, while these studies have shown that SM communication may be an effective tool for reaching and engaging various stakeholders, how the design of corporate CSR communication engenders trustworthiness has yet to be examined. To address this gap, we suggest that SM communication may include important signals related to trust; thus, we investigate whether companies use sources of trustworthiness (reputation, performance, and appearance) while communicating with stakeholders and the response of the latter to such communication. Our empirical analysis is based on a database containing over 66,000 CSR‐related messages from eight companies focusing on communication extracted from Twitter. These data are coded according to three sources of trustworthiness and two dimensions of CSR communication (social and environmental). Our findings indicate that all three attributes of trustworthiness are used by companies in their CSR social media communication. We also document how corporate efforts to use CSR communication that engenders trustworthiness influence stakeholder engagement. Our study therefore contributes to the literature on trust in relation to CSR by illustrating the importance of signaling that includes different sources of trustworthiness or their combination in corporate communication. By analyzing how the various trust attributes included in CSR communication affect SM reactions, we also identify which attributes lead to greater stakeholder engagement overall, particularly for the two analyzed dimensions of CSR communication.