Corporate Social Performance Research Articles

Corporate board network and green technological innovation: a view of guanxi culture in China

ABSTRACT Given the pivotal role of guanxi as an informal arrangement for resource acquisition in China, this study integrates social capital theory with social network analysis to explore the effect of firms’ guanxi in board networks on green technological innovation (GTI). The findings suggest that firms with more stable and flexible guanxi are likely to have access to more adequate and diverse social capital to support GTI. Furthermore, we theorise that these relationships are more pronounced for firms with better corporate social responsibility performance, as this may strengthen connected firms’ trust in the focal firm and allow it to draw more GTI resources. This effect, however, only holds for non-state-owned firms. Stronger absorptive capacity also enhances the contribution of guanxi to GTI by helping firms gain more recognition from connected firms for GTI engagement, thereby positively moderating the relationships. This study may provide insights for shareholders to promote firms’ GTI.

Sustainable resource management and community corporate social performance: strategic implications of corruption control in MNEs

PurposeThe consequences of corporate corruption control (CCC) have either been investigated outside the firm (e.g. foreign direct investment inflows) or inside the firm (e.g. profitability). Yet prior research addresses these implications separately, treating them as distinct phenomena, ignoring questions at their intersection. However, corruption control can be leveraged to benefit both organizations (internally) and environments (externally). In line with open systems theory, this study aims to explore a ripple effect of corruption control not only inside organizations (efficiency through adoption of sustainable resource management practices) but also outside [community-centered corporate social performance (CSP)].Design/methodology/approachUsing a longitudinal sample of multinational enterprises from Forbes list of “The World’s Largest Public Companies,” the authors use a cross-lagged panel design to provide clarity regarding causal effects.FindingsResults confirm causal directionality and support the positive effect of corruption control on resource management and community CSP, contributing toward understanding implications at the organization–environment interface.Originality/valueThe authors examine both internal and external implications of CCC. The use of a cross-lagged design that is relatively novel to the management field allows to check for casual effects between CSP elements that were previously assumed to have reciprocal casual effects.

Green public procurement and corporate environmental performance: An empirical analysis based on data from green procurement contracts

Green public procurement (GPP) is regarded as a vital tool for achieving energy conservation and emission reduction. This policy aims to guide enterprises towards cleaner production by creating market demand for green products on the demand side. However, it remains unclear whether GPP can genuinely improve corporate environmental performance. This study reviews relevant policy documents and constructs a wordlist of “green procurement contract" using the Word2vec model. By employing text analysis, we identify public procurement contracts that meet green standards. Subsequently, we match these contracts with data from China's A-share-listed companies to empirically test the impact of GPP contracts on corporate environmental performance. The findings reveal that GPP significantly enhances corporate environmental performance, primarily through conceptual governance effects, source governance effects, terminal governance effects, and supervision governance effects. Heterogeneity analysis indicates that this environmental incentive effect is particularly significant among non-state-owned enterprises and small and medium-sized enterprises. Additionally, the effect is more pronounced in regions with high government environmental awareness and moderate environmental enforcement intensity. Further analysis shows that GPP also improves corporate social responsibility performance and promotes corporate ESG performance, thereby fostering sustainable development. Moreover, the study points out that increasing the transparency of information disclosure, enhancing procurement efficiency, and maintaining the stability of procurement relationships all contribute to strengthening the environmental performance incentive effect of GPP. This article helps to deepen the understanding of the “proactive government” promoting the development of green economy and also provides theoretical reference for the breakthrough of corporate green transformation under the target of “dual carbon.”

CEO Benevolence and Corporate Social Performance

The involvement of corporate CEOs/directors in not‐for‐profit (NFP) leadership is significant for corporate and NFP sectors. We refer to this activity as ‘benevolence’. These benevolent leaders bring synergistic effects to each leadership position. Although research has examined various characteristics of NFPs and corporate leaders independently, the impact of this combination of serving NFPs and listed firms is worth examining, given current debates on the form and function of stakeholder capitalism. We provide preliminary exploration of NFP leadership positions of CEOs/directors, from 2010 to 2019. Data were hand‐collected from CEO/director biographies in annual reports. NFP roles were verified through public sources (e.g., Australian Charities and Not‐For‐Profit Commission). We identify meaningful patterns in NFP leadership positions held by the those in the top echelons. In evaluating whether benevolent leaders influence corporate ethical outcomes, we find a significant positive association. Our findings establish the foundation for future inquiries on the influence of benevolent leaders on many corporate outcomes.

Corporate social initiatives and wealth creation for firms-an empirical examination

Purpose This study aims to examine whether social initiatives adopted by firms lead to improved financial performance. The authors analyse the impact of different elements of social initiatives on wealth creation for firms in terms of operating and market performance. Design/methodology/approach The study is based on the social initiative scores of over 4,500 firms collected from Thomson Reuters' ESG database. The study uses two-stage least squares (2SLS) to analyse the relationship between social initiatives and firm performance. Findings Profitable, mature, capital intensive and firms with high sales growth rate tend to invest more in social initiatives. Firms with high agency costs invest in social initiatives for workforce efficiency, maintaining human rights and product responsibility. The study documents evidence that social investments are value creating mechanism for firms which leads to improved financial performance in terms of operating and stock market performance. Firms with high dividend intensity invest in social initiatives for workforce welfare and human rights initiatives. Investment in employee well-being and community initiatives results in intangible benefits such as improved stock market valuation. Practical implications The research model has not considered the impact of intervening variables to understand the relationship between corporate social performance and corporate financial performance. Social implications Firms ought to recognize that social investment is beneficial in terms of value creation of firms as stock market perceive such investments favourably. Firms must focus more on community development initiatives and workforce initiatives for the value creation of firms compared to investments directed towards human rights initiatives and product responsibility initiatives. Originality/value This study focusses exclusively on the social dimension of the CSR activities. The authors examine the impact of social welfare scores on firm performance by analysing the valuation effects on scores representing workforce, human rights, community and product responsibility. Moreover, the paper also examines the impact of a new dimension of product responsibility on firm performance. They also focus on both aspects of financial performance in terms of operating performance (proxied by ROE) and the joint impact of both operating and market performance (proxied by Tobin’s Q). This paper contributes to the research on the linkage of social performance to financial performance by observing that firms with high agency cost characteristics tend to invest in social initiatives for work force efficiency, maintaining human rights and product responsibility.

The Influence of Corporate Social Responsibility and Customer Retention on Customer Relationship Management Performance with the Mediating Effect of Customer Trust in SMEs of Ningxia Province, China

In recent years, e-commerce has experienced rapid expansion and developed as the mainstream business practice in small and medium-sized enterprises (SMEs) in developing areas of China. There are a variety of channels for consumers to purchase from. Therefore, maintaining customers is increasingly important. In the meantime, companies expect to gain more significant insights into their consumers’ demands to earn customer trust, thus achieving customer relationship management (CRM) performance. This study develops based on trust theory and consists of four latent variables: corporate social responsibility (CSR), customer retention, customer trust, and customer relationship management performance. The current study used probability and random sampling techniques. It conducted the questionnaire survey to collect data form managers of SMEs in Ningxia province of China. The Partial least square structural equation modeling (PLS-SEM) technique was used for this study. As a result, a total of 150 respondents were usable for these questionnaires. The study revealed that corporate social responsibility and customer retention have a positive effect on customer relationship management performance. Moreover, customer trust has been examined that it had a positive effect on customer relationship management performance. In addition, customer trust was discovered as a partial mediation between the relationship of corporate social responsibility, customer retention, and customer relationship management performance. Furthermore, based on the samples analyzed, the proposed model seems to be fitted considerably well. Therefore, this study intends to contribute to a better understanding of factors influencing customer relationship management performance in Chinese SMEs, thereby providing companies with practical ideas to improve overall performance.

The conjoint effects of corporate social responsibility performance and report tone on financial constraints: Evidence from China

Using corporate social responsibility (CSR) disclosure data from Chinese A-share listed firms between 2008 and 2022, we examine the conjoint impact of CSR performance and the tone of CSR reports on financial constraints. The research reveals a significant negative correlation between CSR performance and financial constraints, indicating that the better a firm's CSR performance, the fewer financial constraints it faces. The tone of CSR reports is also negatively correlated with financial constraints. It has a synergy effect with CSR performance, enhancing the alleviating effect of CSR performance on financial constraints. After conducting a series of robustness tests, such as addressing endogeneity and substituting variables, the main results remain robust. Furthermore, relative importance analysis shows that the impact of CSR performance on financial constraints is significantly greater than the impact of the tone of CSR reports. In additional analysis, we also examine the effects of corporate disclosure of creditor protection information, the presence of deficiencies in information, and firm transparency. Against the backdrop of heightened economic volatility and escalating risks, our findings offer valuable guidance on how firms can strategically utilize social responsibility measures to mitigate financial constraints.

Investigating the nexus of corporate social responsibility and marketing performance in a medium-sized clothing manufacturing enterprise in South Africa

Organisations all over the world are increasingly adopting Corporate Social Responsibility (CSR) as a strategic not only for improving their brand image but also making a meaningful contribution to the welfare of society. This trend includes incorporating socially responsible aspects into marketing strategies, resulting in goods and services that benefit the community at large. Small and Medium Enterprises (SMEs) play an important role in this framework, as they contribute significantly to both social and economic growth. Using a quantitative methodology, this study examines the experiences of a manufacturing organisation in the eThekwini District Municipality of KwaZulu-Natal that has included CSR into its marketing strategies. The analysis employs the Ordinary Least Squares (OLS) method, with data evaluated using the Statistical Package for Social Sciences (SPSS). This study collects and analyses pre- and post-CSR implementation quarterly data on sales performance and customer retention. The empirical findings offer a multifaceted picture of the impact of CSR on marketing performance. Contrary to assertions, that there appears to be a substantial relationship between customer retention rates and marketing performance following CSR implementation. Interestingly, the study discovers an inverse association between sales volumes and marketing performance, implying that a rise in sales does not always result in improved marketing results for the organisation in question. This unexpected consequence shows the intricate interplay between CSR programmes and marketing outcomes, providing useful insights for businesses, particularly those in the South African manufacturing sector, attempting to negotiate the complexities of CSR-driven marketing strategies. This study contributes to a better understanding of how CSR efforts can be strategically integrated with marketing goals to promote both social well-being and business success.

Corporate social responsibility and firm value: the role of enterprise risk management and corporate governance

Purpose Corporate social responsibility (CSR) has gained tremendous importance after several corporate scandals, financial crises and the rise of the hyper-competitive world. Firms must address multiple stakeholders’ interests to increase firm value. This study aims to investigate the effect of CSR on firm value. This study also examines the mediating role of enterprise risk management (ERM) and the moderating influence of corporate governance (CG) in this CSR-firm value relationship. Design/methodology/approach The sample of the study comprises 119 Pakistan Stock Exchange (PSX) listed firms and the study covers the period from 2010 to 2021. The corporate social responsibility performance has been quantified across five dimensions. These aspects are product, environment, employee relations, diversity and community. Four proxies i.e. strategy, operation, reporting and compliance, have been used to measure ERM. The governance quality of the sample companies was evaluated using the governance index, which included 29 governance provisions. The authors used the dynamic panel data technique (system-GMM) is used to achieve the objectives of the study. Furthermore, a firm’s engagement in CSR activities can also be measured through a multinational financial approach to check the robustness of the result. Findings Based on the regression analysis, the authors discovered that CSR was positively connected with firm value, validating the stakeholder view of CSR. Furthermore, following Baron and Kenny’s (1986) mediation technique, the findings confirm that ERM mediates this association. These results are robust by using the bootstrapping tests by Preacher and Hayes (2004). Furthermore, the result shows that corporate governance (CG) is positively connected with firm performance, and this relationship is strengthened in the presence of an effective governance system in the organization. Practical implications This study provides useful insights to regulators, investors and policymakers to consider CSR as a value-enhancing factor and encourage the development of enterprise risk management and compliance with CG mechanisms to improve firm value. Originality/value The presented analysis strengthens the existing CSR–firm value relationship by analyzing the mediating and moderating roles of ERM and CG, which have not yet been tested, particularly in the context of Pakistan.

Does climate risk vulnerability affect the value of excess cash? International evidence

AbstractIn this paper, we investigate the impact of climate risk on the value of excess cash. Based on an international sample of 6468 firm‐year observations from 2010 to 2019, the results show that climate risk vulnerability positively affects the value of excess cash. This suggests that investors may consider firms with excess cash to be better positioned to challenge extreme weather events by using cash reserves to cover up expenses and maintain operations. This positive effect is more pronounced for firms operating in countries with strong investor protection, for those with strong governance quality, and for those with high corporate social responsibility performance. However, it is less accentuated in the presence of financial constraints. Overall, our findings have significant practical implications for decision‐makers, investors, and policymakers.

Corporate strategic aggression and environmental investment decisions: Evidence from A-share listed firms

Corporate strategy greatly influences corporate investment activities. This study seeks to better understand the relationship between the level of corporate strategic aggression and environmental investment decisions based on 2011–2020 data. We find that increasing the intensity of strategic aggression effectively increases environmental investment. Moreover, this effect is incentivized by good corporate environmental, social, and governance performance, innovation ability, and management tone manipulation. Although financing constraints may hinder the positive effects of corporate aggression on environmental investment, independent directors and corporate risk promote maximum positive effects. These findings enable companies to identify strategically motivating factors for improving environmental protection.

Reinvigorating radioactive wastewater to the ocean: Investigate the effect of board diversity on environmental corporate social responsibility in the context of Japan

The discharge of radioactive wastewater into the eastern ocean from the Fukushima Daiichi nuclear plant, a decision that comes from the Japanese government and TEPCO (Tokyo Electric Power Company), has subjected Japanese firms to reputational damage risks and increasing environmental legitimacy pressure from multiple stakeholders in environmental corporate social performance (ECSR) than ever. In the present research endeavor, we draw upon the existing body of scholarly literature pertaining to gender-diverse board and business ethics as a critical element of steering ocean and coastal environmental management. This undertaking aims to provide original insights into the factors influencing board gender diversity (BGD) and its subsequent impact on ECSR within the specific context of Japan. Grounded in the theoretical framework of legitimacy theory, we put forth a conceptual model designed to elucidate the relationship between BGD and ECSR. Additionally, this study delves into the moderating influence of financial constraints between BGD and ECSR. To empirically examine our conceptual framework, we collected data from two primary sources: Toyo Keizai Inc. and Nikkei Inc. The findings of our investigation reveal a statistically significant positive relationship between BGD and ECSR performance. Furthermore, our results indicate that financial constraints serve to intensify the association between BGD and engagement in ECSR initiatives. Finally, we corroborate the robustness of our findings through various extensions of our analytical models.

Female talent and corporate social performance

This paper analyzes the relationship between female talent and corporate social performance (CSP). Using a sample of US firms from the COMPUSTAT database between 1991 and 2013, we investigate how state-level Paid Family Leave (PFL) laws affect firm CSP. We find that reducing barriers to female employment positively impacts firms' social performance, as measured by corporate social responsibility (CSR) scores. Our results show that firms headquartered in states with effective PFL laws have higher CSR strengths and lower CSR concerns. Additionally, the positive impact of PFL laws on CSP is more pronounced for firms included in the Working Mother Magazine's 100 Best Companies List. Our study provides important insights for policymakers and corporate leaders on the benefits of supporting female employment through PFL laws.

Speed up for sustainable development: High-speed rail and corporate ESG performance

With sustainability becoming a fundamental concept in development, there has been a growing emphasis on corporate environmental, social, and governance (ESG) performance. This paper examines how the high-speed railway (HSR) network would affect enterprises' ESG performance by constructing an indicator of HSR network advantages based on social network analysis (SNA). We found that the HSR network advantages can enhance corporate ESG performance, and this effect is achieved by alleviating financing constraints and promoting corporate technological innovation. Meanwhile, the effect of HSR network advantages on corporate ESG performance is more pronounced in private firms, low-polluting industries, and cities with high initial transportation resource endowments. Furthermore, we further examine the impact of the sub-dimensional characteristics of the HSR network on corporate ESG performance. We found that degree centrality (DC), betweenness centrality (BC), and closeness centrality (CC) all have a positive effect on enhancing firms' ESG performance, but closeness centrality (CC) produced the largest impact.

Effects of CEO Tenure and Education on Corporate Social and Environmental Performance: Evidence from Listed Firms on Namibia Stock Exchange

Given the increasing focus on sustainability and corporate responsibility, it is essential to comprehend the influence of CEO characteristics on the accomplishment of a company. The main objective of this research is to investigate the correlation between the length of time a CEO serves in their position, their level of education, company corporate social performance, and environmental performance. The study utilized a descriptive research design, employing a quantitative method by conducting a cross-sectional survey. The study sample comprised Chief Executive Officers (CEOs) from 52 publicly traded businesses, and the analysis was based on 39 collected responses. With the help of SPSS, a multiple regression analysis was performed to evaluate the influence of CEO term of office and education on business social performance and environmental performance. The results indicate that CEO tenure has a favorable and substantial influence on environmental performance, whereas CEO education substantially influences corporate social performance. The results offer useful insights into the complex correlation between CEO characteristics and sustainability success. We propose policymakers to implement restrictions or recommendations for the length of time a CEO can hold their position and their educational qualifications. This will help ensure the efficient management of social and environmental responsibilities. Moreover, providing incentives for CEOs and high-level executives to participate in continuous education and training programs could boost their comprehension of social and environmental matters, ultimately leading to the implementation of enhanced sustainability practices within organizations.

Did Australia's brief period of carbon pricing impact corporate environmental, financial or social performance?

This study utilizes transaction cost and legitimacy theories to examine whether a carbon tax affects listed companies' environmental, financial and social performance within the context of Australia's National Greenhouse Energy Reporting (NGER) Act. We use a base sample of 346 listed company-year observations for 2012–2017 and employ the System Generalized Method of Moments (GMM) to deal with bias arising from endogenous explanatory variables in our analysis. We find that the short period of implementation of a carbon tax in Australia was not successful in improving the carbon emissions of the high polluters subject to the tax in our sample. High polluters subject to the tax experienced a positive impact on financial performance and social performance. However, many entities beyond listed companies were subject to the tax, and the period of the tax saw a reduction in total emissions. We conjecture that industry assistance and free carbon credits granted to companies explain these results.

Corporate Environmental, Social, and Governance (ESG) Performance and the Internal Control Environment

SYNOPSIS We consider how corporate environmental, social, and governance (ESG) performance relates to the strength of the internal control environment. The transparent reporting hypothesis predicts that high ESG performance signals ethical decision making and/or strong financial performance, both of which manifest in a stronger internal control environment and, therefore, fewer material weaknesses in internal controls. We find that ESG performance is negatively related to the likelihood of general internal control weaknesses, consistent with transparent reporting. We also find that ESG performance is negatively related to company-level internal control weaknesses, which are considered relatively severe. Further, we find that ESG performance is negatively associated with specific internal control weaknesses that indicate a lack of ethical tone at the top. We find support for both ethical and performance explanations behind the transparent reporting hypothesis. Overall, our results suggest that ESG performance is positively associated with the strength of the internal control environment. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M14; M40; M42.

State-Owned Enteprises, Political Ideology, and Corporate Social Performance

State-Owned Enteprises, Political Ideology, and Corporate Social Performance

The Relationship Between CSR Contracting and Corporate Social Performance: A Comparative Approach

The Relationship Between CSR Contracting and Corporate Social Performance: A Comparative Approach

The Impact of CHROs on Corporate Social Performance:Does Gender Make a Difference?

The Impact of CHROs on Corporate Social Performance:Does Gender Make a Difference?