Corporate Social Responsibility Choice Research Articles

Legacy of ideology: The enduring effect of CEOs’ socialist ideological imprint on private firms’ employee-related CSR

The question of how the legacy of ideology has an enduring effect on firms’ decisions remains largely unanswered. Drawing from the imprinting theory and corporate social responsibility (CSR) literature, in this study, we examined when and how chief executive officers’ (CEOs) socialist ideological imprints play an economically significant role in shaping firms' employee-related CSR (E-CSR) in China during its remarkable political transitions. We used data from 4,094 private Chinese firms as our sample and found that the socialist ideological imprints of private firms’ CEOs have a positive impact on the firms’ E-CSR decisions. Moreover, this imprinting effect was found to be more salient when CEOs joined the Communist Party of China before the political transition of Deng Xiaoping’s reform, but was found to be more constrained when CEOs perceived that the level of the guanxi requirements was high. This study sheds new light on how business leaders’ ideological imprints may have an enduring influence on their firms’ discretional CSR choices toward multiple stakeholders, particularly the employees. Moreover, it enhances the imprint literature by spotlighting the newly identified boundary conditions of imprinting effects upon firms’ CSR strategies.

Explore the Approaches to Corporate Social Responsibility Implemented by E-Commerce Platforms in China During the Early Stage of COVID-19: A Mixed-Methods Content Analysis.

The aim of this study was to explore (a) the approaches to corporate social responsibility (CSR) implemented by e-commerce platforms in China during the early stage of coronavirus disease 2019 (ESCOVID-19) and (b) the factors associated with the platforms' choice of these approaches. We collected the CSR data from the Internet during ESCOVID-19. Conventional content analysis was used to develop the targeted approaches. Finally, based on the frequency analysis of each approach, rank-based nonparametric testing was conducted to answer objective (b). Three main approaches (ie, donative CSR actions, responsive CSR actions, and strategic CSR actions) and 8 subapproaches were implemented. The strategic approach was the most frequently used approach. The platforms with higher market size implemented more donative and strategic CSR actions than did the platforms with lower market size. Donative CSR actions were significantly implemented in the earlier period, while strategic CSR actions were significantly implemented in the later period. Our research highlights the importance of e-commerce platforms to help the public survive and identifies that market size and time were associated with the platforms' CSR choice. The design of prevention and control policies should incorporate and support e-commerce platforms and evaluate the factors when confronting future public health crises.

Corporate Profit Tax and Strategic Corporate Social Responsibility Under Foreign Acquisition

Abstract This study investigates government public policies facing competing firms’ strategic corporate social responsibility (CSR) activities and finds that the choice of CSR crucially depends on corporate profit tax. We demonstrate that strategic CSR decreases while social welfare increases with corporate tax. When the government grants uniform output subsidies, we show that bilateral CSR leads to a lower CSR level than under unilateral CSR but bilateral CSR is always beneficial to society. However, when the government grants discriminatory output subsidies which yield different levels of unilateral CSR, we show that domestic CSR leads to a lower CSR level than under foreign CSR. In an endogenous CSR choice game, domestic CSR (no CSR) is a Nash equilibrium when corporate tax is low (high) under the uniform subsidy, while foreign CSR could be a Nash equilibrium when corporate tax is low under the discriminatory subsidy.

Investigating a Potential Relationship between Corporate Social Responsibility and Financial Growth

Modern business has recently trended towards a focus on corporate social responsibility (CSR) due to a growing sense that companies should uphold ethical standards not only for their direct stakeholders, but also for society at large. This study therefore investigated whether a relationship between companies’ CSR/philanthropic efforts and financial growth may exist. The six public companies investigated (Alphabet, Apple, Bank of America, JP Morgan Chase, Kroger, and Walmart) were the six highest-ranked on the 2019 Fortune 500 list that also appeared on the 2018 Fortune Change the World list. One notable philanthropic effort for each company was selected. Financial statements from the year before, during, and after the philanthropic efforts began were examined and sales revenue was recorded. A positive correlation was found between Apple’s and Kroger’s financial success and philanthropic efforts but not for the other four companies. This may indicate that CSR is a strong factor in how customers perceive those two companies. The weak correlation found between these two variables for the four remaining firms may demonstrate that the relationship between CSR and consumer choice is weak or nonexistent. The results of this study are intended to prepare future research involving the potential relationship between corporate social responsibility and sales revenue, by providing a framework for related statistics and information among top philanthropic public corporations.

Early Corporate Social Responsibility and Executive Compensation: The Negative Externality Perspective

This research develops a new argument that departs from traditional theories that explain the potential impact of Corporate Social Responsibility (CSR) on Chiefs Executive Officers (CEOs) compensation. More specifically, we argue that if CSR investments provide value for firm’s shareholders and stakeholders, they can also decrease firm’s competitors’ value (negative externality hypothesis). As a result, inefficient CEO compensation may arise even if CSR choice allows managers to act in the best interest of firm’s shareholders and non-investing stakeholders. In sum, our new perspective indicates that excessive levels of CEO compensation are more than a principal-agent-stakeholder problem. In addition, our new theoretical argument suggests that voluntarily CSR should not be a relevant factor for achieving efficient levels of CEO compensation.

How CEO narcissism affects corporate social responsibility choice?

This study aims to explore how CEO narcissism affects firms’ CSR choice given that the relationship between chief executive officer (CEO) narcissism and corporate social responsibility (CSR) has yielded inconclusive results. On the basis of upper echelon theory and the attention-based view, we first propose that narcissistic CEOs allocate more attention to peripheral CSR and less attention to embedded CSR. We then explore the boundary conditions that may affect CEO narcissism and CSR choice. We find that CEO narcissism is positively related to peripheral CSR and negatively related to embedded CSR via a sample of 4792 firm-year observations in the manufacturing industry of Chinese A-share listed firms. Results show that family ownership weakens the negative relation between CEO narcissism and embedded CSR. Moreover, CEO duality strengthens the positive relation between CEO narcissism and peripheral CSR and strengthens the negative relation between CEO narcissism and embedded CSR. These findings have significant implications for the CSR literature, narcissism research, and the attention-based view.

Riding the Crest of Wave: CEO Narcissism and Corporate Social Responsibility Choice

While the relationship between chief executive officer (CEO) narcissism and corporate social responsibility (CSR) has yielded inconclusive results, this study aims to explore which type of CSR acti...

Signaling Product Quality Information in Supply Chains via Corporate Social Responsibility Choices

This study focuses on how an upstream supplier signals the private information of its product quality with corporate social responsibility (CSR) choices to a downstream retailer and uninformed consumers in the final market. We build a signaling model to: capture the strategic interactions among the supplier, the retailer, and the final consumers in the supply chain; characterize completely the set of all separating perfect Bayesian equilibriums (PBEs); and finally, select a unique equilibrium that satisfies the intuitive criterion for exploring some comparative statics. The equilibrium results show that under some technical conditions: (1) a set of moderate levels of CSR conduct signal the upstream supplier’s high quality in the sense of separating PBEs; (2) the unique separating PBE satisfying the intuitive criterion is the one with the lowest CSR level that separates a high-quality supplier from a low-quality supplier; (3) the lowest CSR level decreases in the proportion of informed consumers and the low-quality supplier’s marginal CSR cost, but is independent of the high-quality supplier’s marginal CSR cost; (4) the profits of the high-quality supplier increase in proportion to the number of informed consumers and the low-quality supplier’s marginal cost CSR, but decrease in proportion to the high-quality supplier’s marginal CSR cost. Managerial insights are also discussed.

An external perspective on CSR: What matters and what does not?

AbstractThe paper aims at investigating external factors influencing organizational corporate social responsibility (CSR)‐related decision making. Two theoretical perspectives—stakeholder theory and institutional theory—have been applied to compile a list of external factors that might affect a company's CSR choices. As a result, a framework built on the government‐related, society‐related, and business‐related groups of external factors is being suggested. This framework is used in the paper to answer (a) to what extent do different external factors influence CSR‐related decisions in large Danish companies and (b) how has that influence changed over the years. The research takes a qualitative approach and is designed as a multiple‐case study. Empirically, the paper relies on data collected from semi‐structured interviews with CSR specialists and managers and presents a dynamic perspective on the pressure exercised by the external factors on CSR decisions and choices.

Possible Roles of Corporate social responsibility (CSR) in promoting sustainable Development in Nigeria

Corporate social responsibility (CSR) continually plays a pivotal role in both developed and developing nations. However, there exist an imbalance of CSR choice implementation by several organization driven by of external versus intrafirm forces. Although government is at liberty to pass laws to encourage CSR, they lack the authority to enforce choice. This paper examines the sustainable developmental role of CSR, highlights the various challenges experienced and appraises CSR implemented in a bid to continually encourage the propagation of CSR in Nigeria. The results revealed that CSR implementation aids the eradication of several socio-economic trends plaguing Nigeria.

Investor Tastes, Corporate Behavior and Stock Returns: An Analysis of Corporate Social Responsibility

We classify institutions into socially responsible institutions (SRI) and non-socially-responsible institutions (NSRI) based on the value weighted Corporate Social Responsibility (CSR) scores of their portfolio holdings. Controlling for CSR scores, stocks that experience an increase in NSRI ownership realize positive excess returns the following quarter. The positive relation between excess returns and NSRI ownership is stronger for stocks with higher CSR scores. We also find that CSR scores tend to increase more for stocks with lower NSRI holdings. These results, which are consistent with the existence of excess CSR expenditures that reduce firm values, suggest that the mix of institutional investors influences CSR choices.

Do Institutional Investors Drive Corporate Social Responsibility? International Evidence

This paper explores both the role of institutional investors in firms’ corporate social responsibility choices and the impact of social norms on these investors. Using a decade of firm-level environmental and social (E&S) performance data from 41 countries, we find that institutional ownership is positively associated with firm-level E&S performance, with multiple tests suggesting a causal relationship. The impact of institutional investors on firms’ E&S commitments is greatest for foreign investors based in countries with strong social norms regarding E&S, which are predominantly European. Tests that segment by investor type show that these social norm effects hold even for institutional investor types that are subject to market discipline, such as investment advisors. Overall, our results indicate that institutional investors transplant their social norms into the firms they hold around the world.

In the name of charity: Political connections and strategic corporate social responsibility in a transition economy

This study investigates whether firms in China use corporate social responsibility (CSR) to build political networks and, if so, how such CSR decisions affect firm performance. We bypass the empirical difficulty of measuring the value of political networks by using an event study approach. Specifically, we examine how abrupt termination of existing political connections caused by replacement of city mayors affect Chinese listed companies' CSR choices. We find that when a mayor is replaced, the level of and the propensity for CSR activity increase. Such increases are more prominent in firms for which political connections are more valuable, namely, nonstate-controlled firms, smaller firms, and firms operating in cities ruled by more corrupt government. In addition, we find that firms that spend resources to bond with a new government via CSR activities are rewarded: these firms receive higher levels of government subsidies or have a greater propensity to receive future government subsidies. These firms also outperform firms that do not invest in political networking via CSR. Our study adds direct evidence to how and through what channel CSR affects firm performance. We also contribute to the CSR literature on politically motivated CSR strategies.

China's Corporate Social Responsibility with National Characteristics: Coherence and Dissonance with the Global Business and Human Rights Project

This chapter shows how the social and institutional organization and political culture of China have affected how Chinese corporations approach the issue of corporate social responsibility (CSR) in general and CSR-based human rights responsibilities in particular. Part I examines the global context in which Chinese CSR is framed. Part II analyzes the Chinese political context in which CSR operates and the socio-political culture that shapes CSR choices. Notions of socialist modernization, economic development, and the importance of building social, economic and political structures with Chinese characteristics largely shape Chinese policy, drive Chinese administrative institutions, and shape the context in which Chinese enterprises approach CSR issues. Like Chinese state policy, Chinese CSR focuses on issues of economic development and prosperity rather than civil and political rights. Part III considers the effects of these substantive choices on the implementation of CSR in China. In China, the obligations of both state and enterprise are understood in terms of institutional duty to people rather than in terms of individual rights that may be asserted against institutions. That understanding shapes both the approaches to remediation and the relationship between the state and enterprise in regard to CSR compliance. The connection between (1) substance (tied to socialist modernization) and operationalization (tied to the premise that the protection of the liberties of individuals is a state obligation) and (2) the state, the Communist Party and business enterprises, frames the "Chinese Characteristics" of CSR. Only by recognizing this close connection between state policy and corporate responsibility can one understand how CSR is implemented in China and successfully translate global human rights discourse into the Chinese context.

FROM CLIMATE CHANGE TO CUSTOMER DIALOGUE-CSR IN THE SERVICE SECTOR

Strategically, corporate social responsibility (CSR) is important for the competitiveness of enterprises. CSR requires engagement with internal and external stakeholders and it can bring benefits such as cost savings, better customer relationships and human resource management, and more innovations. It can also create new markets and opportunities for growth. The main purpose of this study is to describe what the benefits of CSR are, along with the challenges and ways of cooperating in general, especially in the service sector. The qualitative research is based on two well-known Finnish organizations, Fazer and Kesko, annual reviews and corporate responsibility reports from 2011. According to the results, CSR is a part of day-to-day management and the CSR concept is very broad. It contains many different issues from climate change to customer dialogue. Companies are also ready to take courageous decisions, if these decisions support their own strategy. Results also show that not only the business size, but also the ownership structure seems to affect companies’ CSR choices.

Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility

This study investigates the effects of internal and external corporate governance and monitoring mechanisms on the choice of corporate social responsibility (CSR) engagement and the value of firms engaging in CSR activities. The study finds the CSR choice is positively associated with the internal and external corporate governance and monitoring mechanisms, including board leadership, board independence, institutional ownership, analyst following, and anti- takeover provisions, after controlling for various firm characteristics. After correcting for endogeneity and simultaneity issues, the results show that CSR engagement positively influences firm value measured by industry-adjusted Tobin’s q. We find that the impact of analyst following for firms that engage in CSR on firm value is strongly positive, while the board leadership, board independence, blockholders’ ownership, and institutional ownership play a relatively weaker role in enhancing firm value. Furthermore, we find that CSR activities that address internal social enhancement within the firm, such as employees diversity, firm relationship with its employees, and product quality, enhance the value of firm more than other CSR subcategories for broader external social enhancement such as community relation and environmental concerns.

Corporate Governance and CSR Nexus

Some argue that managers over-invest in corporate social responsibility (CSR) activities to build their personal reputations as good global citizens. Others claim that CEOs strategically choose CSR activities to reduce the probability of CEO turnover in a future period through indirect support from activists. Still others assert that firms use CSR activities to signal their product quality. We find that firms use governance mechanisms, along with CSR engagement, to reduce conflicts of interest between managers and non-investing stakeholders. Employing a large and extensive sample of firms within Russell 2000, S&500 and Domini 400 indices during the 1993–2004 period, we find that consistent with the conflict-resolution hypothesis, the CSR choice is positively associated with governance characteristics, including board independence, institutional ownership, and analyst following. In addition, after correcting for endogeneity of CSR engagement, our results show that CSR engagement positively influences operating performance and firm value, supporting the conflict-resolution hypothesis as opposed to the over-investment and strategic-choice arguments. We find only a weak support of the product-signaling hypothesis as a major motive of CSR engagement.

Determinants of Managerial Values on Corporate Social Responsibility: Evidence from China

This article empirically investigates how Chinese executives and managers perceive and interpret corporate social responsibility (CSR), to what extent firms’ productive characteristics influence managers’ attitudes towards their CSR rating, and whether their values in favour of CSR are positively correlated to firms’ economic performance. Although a large proportion of respondents express a favourable view of CSR and a willingness to participate in socially responsible activities, we find that the true nature of their assertion is linked to entrepreneurs’ instincts of gaining economic benefits. It is the poorly performing firms, or rather, firms with vulnerable indicators – smaller in size, State-owned, producing traditional goods and located in poorer regions that are more likely to have managers who opt for a higher CSR rating. Managers’ personal characteristics per se are not significant in determining their CSR choice. Moreover, controlling for other observed variables, we find that managers’ CSR orientation is positively correlated with their firms’ performance. The better-off a firm is, the more likely its manager is to get involve in CSR activities. Firms with better economic performance before their restructuring would sustain higher post-restructuring performance.

Determinants of Managerial Values on Corporate Social Responsibility: Evidence from China

This paper empirically investigates how Chinese executives and managers perceive and interpret corporate social responsibility (CSR), to what extent firms’ productive characteristics influence managers’ attitudes towards their CSR rating, and whether their values in favour of CSR are positively correlated to firms’ economic performance. Although a large proportion of respondents express a favourable view of CSR and a willingness to participate in socially responsible activities, we find that the true nature of their assertion is linked to entrepreneurs’ instincts of gaining economic benefits. It is the poorly-performing firms, or rather, firms with vulnerable indicators – smaller in size, State-owned, producing traditional goods and located in poorer regions that are more likely to have managers who opt for a higher CSR rating. Managers’ personal characteristics per se are not significant in determining their CSR choice. Moreover, controlling for other observed variables, we find that managers’ CSR orientation is positively correlated with their firms’ performance. The better-off a firm is, the more likely its manager is to get involve in CSR activities. Firms with better economic performance before their restructuring would sustain higher post-restructuring performance.