Firm Corporate Social Responsibility Research Articles

China’s space sector, firm CSR and patent quality

China’s space sector, firm CSR and patent quality

Comparing ad valorem and specific taxes with corporate social responsibility

AbstractThis paper examines the welfare ranking of indirect tax systems with corporate social responsibility (CSR) in a duopoly. Findings show that the two firms' cost and CSR asymmetries both play important roles. If the cost‐efficient firm has a higher CSR level, the standard result in traditional tax theory is sustainable. Namely, ad valorem tax (specific subsidy) policies are considered superior to specific tax (ad valorem subsidy) policies. However, if the cost‐inefficient firm has a significantly higher CSR level, the standard result is reversed. This result remains robust in an oligopoly model or under a tax revenue constraint.

Do Old Board Directors Promote Corporate Social Responsibility?

AbstractThis study investigates the influence of old directors on corporate social responsibility (CSR) using roughly 25,000 firm-year observations from 2001 to 2015 in the United States. We employ the widely used selection, optimization, and compensation (SOC) model from psychology to explain the CSR decisions of old directors. Our results indicate that firms with a higher percentage of old directors tend to have lower engagement in CSR activities. To address endogeneity, we adopt the difference-in-differences method and use the event of sudden deaths and unexpected retirements of old directors and find that our results remain robust. Our analysis also reveals that the negative impact of old directors on CSR is more significant in firms where directors receive fewer reputational spillover benefits from CSR initiatives and/or firms exhibiting poor corporate governance. In addition, this adverse impact of old directors comes from two effects: a reduction in efforts to enhance CSR strengths and an increase in inaction to address CSR concerns. Overall, these findings suggest that the CSR decision-making process of old directors involves assessing the costs and benefits of CSR engagements, consistent with our hypothesis derived from the SOC model.

Do CSR Firms Make Better Acquisitions? - The Case of Taiwan

This study examines the association between Corporate Social Responsibility (CSR) activities measured by two of Taiwan’s leading publishers, the Commonwealth Magazine and the Global View Magazine, and the acquirer’s short- and long-term performances after the merger announcement in Taiwan. We use CEO compensation and the firm’s free cash flow as the proxies for CEO self-confidence. We find that the acquirer’s CSR engagement is positively associated with its long-term performance but not with its short-term performance. CEO compensation is positively associated with the acquirer’s performance, especially after the mandatory establishment of the remuneration committee for publicly traded firms. However, the acquirer’s free cash flow is found negatively associated with its performance, supporting Jensen’s (Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76, 323–329) free cash flow hypothesis or CEO hubris. These findings indicate that the CSR measurements of Commonwealth Magazine and Global View Magazine do provide valuable information for CSR activities and that CSR activities do enhance firm value in the long run. Furthermore, the requirement for the establishment of the remuneration committee does improve the effectiveness of CEO compensation for firm performance in Taiwan.

Do female family managers affect corporate social responsibility in Chinese family firms?

ABSTRACT This study investigates the relationship between female family directorship and Corporate Social Responsibility (CSR) in the specific context of Chinese family firms. It explores the moderating influences of gender inequality, family ownership and economic policy uncertainty. Based on social role theory, we find that female family directorship is associated with a stronger commitment to external CSR engagement than to internal CSR. Moreover, gender inequality and family ownership attenuate the relationship between female family directorship and external CSR, while economic policy uncertainty enhances their impact on external CSR. Overall, we contribute to the literature at the intersection of family firms, female leadership, and corporate social responsibility.

An investigation of corporate social responsibility conformity: The roles of network prominence and supply chain partners

AbstractNumerous studies on corporate social responsibility (CSR) indicate that firms adopt CSR practices for various reasons related to their supply chain. However, the necessity to conform to a firm's own industry CSR norm is overlooked. Conforming to one's industry CSR norm—a herding behavior known as CSR conformity—ensures firm in‐group legitimacy and preserves internal resources for core business activities. On the other hand, deviating from industry norms sets a firm apart from its peers, making the firm more appealing to supply chain partners. Motivated by this dilemma, this study draws on middle‐status conformity theory and explores how a firm's network prominence determines its CSR conformity. Panel data analyses of 1650 firm‐year observations reveal an inverse U‐shaped relationship between firm network prominence and its CSR conformity, indicating that firms with a mid‐level network prominence engage in higher CSR conformity. However, the inverse U is flattened when a firm's supply chain partners (and their respective industries) share similar CSR standards, suggesting that a firm can only prioritize its own industry CSR norms if its supply chain partners share a compatible CSR standard. These findings highlight the importance of understanding CSR from an organizational conformity perspective, especially in the context of supply chain network.

Exploring the multifaced influencing factors of corporate social responsibility in Chinese-listed manufacturing enterprises

Although scholars have conducted research on the corporate social responsibility (CSR) of Chinese firms from different perspectives, there has been no unified conclusion so far. Therefore, identifying the factors that influence CSR in Chinese enterprises is an important topic for further investigation. Does the debt leverage ratio, ownership type, degree of internationalization (DOI), and auditing by the Big Four accounting firms have an impact on CSR? Based on a series of questions, our study aims to explore the influencing factors and relationships of CSR from multiple angles. Using data from 252 Chinese A-share listed enterprises from 2014 to 2019 and the CSR scores from the Hexun.com rating index, we constructed a panel dataset comprising 1,414 firm-year observations. After comparing models, the fixed effects method of panel data is ultimately used for empirical regression. The research results indicate a significant negative correlation between the leverage ratio and CSR. State-owned enterprises (SOEs) outperform non-state-owned enterprises (non-SOEs) in terms of CSR. There is a significant positive correlation between DOI and CSR. However, the contribution of audits by the Big Four accounting firms to CSR in Chinese enterprises is limited. While our study examines many aspects of the elements that affect corporate social responsibility (CSR) in Chinese companies, each firm must consider its circumstances and apply suitable strategies to improve its CSR practices.

The influential ambit of optimal corporate social responsibility investments on the cost of capital in Chinese private firms

AbstractPrivate firms in China are contributing immensely to the country's economic growth. However, increasing the capital cost of private firms in China is a big challenge that needs to be addressed. This study intends to examine the role of optimal corporate social responsibility (CSR) investment while lowering the cost of equity capital and debt capital in Chinese private firms. In addition, this research study reveals the moderating role of state‐owned shares in the association between CSR and private firms' capital costs. By taking a sample of Chinese private firms from 2011 to 2021, this study employs the CSR optimization method. The findings show that CSR optimization tends to reduce the cost of equity capital and debt capital in Chinese private firms. Further investigation shows that over‐investment in CSR increases the cost of capital. Moreover, an increase in state‐owned shares strengthens the negative relationship between the cost of debt capital and optimal CSR investments. The present study's findings are helpful for Chinese firms to undertake optimal CSR investment.

The Ideological Imperative: Corporate Social Responsibility and News Media Coverage of Firms

Although prior research attributes news media coverage of firms to the alignment of firm behavior with societal expectations of appropriateness, the appropriateness of firm behavior is judged through an ideological lens. Therefore, the influence of a firm’s behavior on its news media coverage is likely to be contingent on news organizations’ ideology. Focusing on corporate social responsibility (CSR) as the focal firm behavior, we argue that conservative news organizations are less likely to consider CSR an appropriate firm behavior because conservatives view CSR as privileging progressive ideals and as undermining shareholder interests. As such, we hypothesize that compared with other news organizations, conservative news organizations are less likely to cover socially responsible firms positively. This relationship is likely to be strengthened for firms led by conservative chief executive officers and for firms with poor stock market performance. We examined the coverage of the S&P 1500 firms from 2002 through 2011 in U.S. newspapers and found support for our hypotheses that compared with other newspapers, conservative newspapers report less positively about socially responsible firms and that this effect is strengthened for conservative-led firms. In contrast to what we expected, however, we found some evidence that socially responsible firms with a strong stock market performance are, in fact, covered less positively in conservative newspapers. Taken together, our theory and findings contribute to an understanding of how the news media’s ideological heterogeneity shapes the relationship between firm behavior (in our case, CSR) and news media coverage of firms. Funding: Y. Dewan received funding from HEC Foundation. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.17237 .

Corporate governance and corporate social responsibility: Evidence from directors' and officers' liability insurance

AbstractTheoretical theories underpin the governance effect of directors' and officers' (D&O) liability insurance include agency costs and stakeholder interests. Motivated by mixed evidence on the corporate governance effects of D&O, we ask whether and how the directors' and officers' (D&O) liability insurance affects corporate social responsibility (CSR) performance in China, one of the largest and fastest growing economies in the world. We develop two contrasting hypotheses: (1) supervision and incentives versus (2) opportunism. To test these hypotheses, we rely on Chinese A‐share market data and fixed effect panel regressions, along with a battery of robustness checks, including Heckman sample selection bias, two‐stage least square instrumental variable (2SLS‐IV), difference‐in‐difference (DiD), propensity score matching (PSM) analyses. Consistent with supervision and incentives hypotheses and stakeholder theory, we find that D&O liability insurance significantly increases firm's CSR performance and firms renewing D&O liability insurance with the same insurers tend to have better CSR performance. Two possible mechanisms supporting this positive relation between D&O liability insurance and CSR performance are information transparency and accounting conservatism. Aside from theoretical contributions, our findings offer important practical contributions such as promoting D&O as external governance and ensuring the functions of D&O insurance comprehensively and correctly understood. Integrating D&O insurance with CSR can be viewed as an important business strategy by mitigating risks, enhancing reputation, ensuring legal compliance, and supporting responsible decision‐making.

Fulfilling stakeholders' demand: Exploring CSR assurance's contribution to firms' environmental and social disclosures

AbstractThis paper rigorously explores the impact of corporate social responsibility (CSR) assurance on the environmental and social disclosures of S&P 500 firms over the period 2010–2018. Integrating annual financial, CSR assurance and environmental and social disclosures data, our study unveils a positive association between CSR assurance and firms' environmental and social disclosures. In a pioneering analysis, we delve into the nuanced interplay between CSR assurance, female directors and environmental and social disclosures. Intriguingly, our findings reveal a negative and significant interaction between female directors and CSR assurance, shedding light on potential substitutes in shaping environmental and social disclosures. Furthermore, our study uncovers the moderating effect of sensitive industries, indicating a positive relationship between CSR assurance and environmental disclosures. Importantly, these insights remain robust across alternative estimation approaches. This study marks a notable contribution by being the first to scrutinize the implications of CSR assurance on social disclosure, investigate the substitutive role of female directors in comparison with CSR assurance and shed light on the added significance of CSR assurance in firms operating in sensitive industries. Our findings provide valuable insights for corporations and stakeholders amid escalating demands for comprehensive and reliable reporting on environmental and social matters. Likewise, this study underscores the potential policy implications of promoting or mandating CSR assurance, given its positive impact on environmental and social disclosures. Policymakers are urged to consider initiatives fostering gender diversity on boards and industry‐specific approaches to enhance sustainability‐related disclosures, aligning regulatory frameworks with evolving stakeholder expectations.

The mediating role of corporate social responsibility in good corporate governance and firm value relationship: evidence from European financial institutions

Purpose This paper aims to investigate the direct and indirect links between good corporate governance (GCG) and firm value using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach The data used in this research was collected from the Thomson Reuters Eikon ASSET4 database, involving 108 financial institutions belonging to 12 European countries listed on the stock exchange between 2007 and 2019. A multivariate linear regression analysis was conducted to test the hypotheses of this study. Findings Our results show that GCG has a positive effect on the firm value and CSR practices. Interestingly, the results indicate that CSR positively influences firm value. The results also reveal that CSR partially mediates the relationship between GCG and firm value. Originality/value This study contributes to the literature by providing evidence on how GCG increases firm value with the mediation mechanism of CSR in the link between GCG and firm value. To the best of our knowledge, it is the first research work documenting that GCG leads to better CSR, which ultimately results in increasing firm value of companies from the financial sector by bridging the information gap for this critical industry in the context of a developed market like Europe.

Geographic location and corporate social responsibility: urban versus non-urban firms

ABSTRACT This paper examines whether and how firm headquarters location affects corporate social responsibility (CSR) performance. Utilizing a propensity-score matched sample, we find that comparing to their urban counterparts, non-urban firms are less likely to spend resources on CSR programmes while exhibit a similar degree of socially irresponsible behaviour, resulting in a lower overall CSR score. Further analysis indicates that the availability of financial resources, public monitoring, and social capital mediate the relationship between firm location and CSR performance. Our research adds to the debate on CSR impetus by lending support to the economic incentive of CSR engagement and provides evidence of the social impact of location of corporate headquarters.

Improving mineral mining enterprises environmental performance through corporate social responsibility practices in China: Implications for minerals policymaking

Corporate social responsibility of mineral mining sector enterprises is greatly important to understand due to its significant role in the social and environmental footprint of the country. Over the years, the natural resources development sector, especially the mineral mining industry, has shown tremendous growth. Although it brought significant profitability for the enterprise as well as a great contribution to economic growth, However, its social and environmental impacts brought serious challenges for the global community. Therefore, scholars and practitioners in the natural resources management sector, especially the mineral mining sector, call for the importance of corporate social responsibility for enterprises to minimize their social and environmental impact. However, in the context of the mineral mining sector, it is unclear whether corporate social responsibility practices (i.e., environmental conservation, waste reduction and sustainability initiatives) attract stakeholders to participate in corporate social activities and how to improve the environmental performance of mineral mining enterprises. Keeping in mind the limitations of existing research, this paper aims to study the corporate social responsibility and environmental performance of mineral mining firms. In addition, the study incorporates the role of stakeholder engagement as a mediator, which opens a new path for the effective implementation of corporate social responsibility. The study adopted a survey method for data collection, and data was collected from 227 managers that were utilized in this study. The data collected from managers of mineral mining companies was utilized, and we employed structural equation modeling techniques to find robust results. The findings reveal that environmental conservation and waste reduction strategies under the framework of corporate social responsibility directly not influence the environmental performance of the enterprises. However, stakeholder engagement serves as bridge among environmental conservation, waste reduction strategies and environmental performance of the mineral mining enterprises. Whereas sustainability initiative could directly improve environmental performance. The findings of the study provide important insights for mineral policy formulation and managerial decision making to foster environmental performance of mineral mining enterprises in China.

Intersection Between a CEO’s Organizational Identification and Ethical Perspective: A Conceptual Framework for Firm CSR Engagement

This paper introduces a conceptual framework to explore the effect of a chief executive officer’s (CEO) organizational identification and their perceived importance of ethics on a firm’s corporate social responsibility (CSR) practices. There is a growing consensus among CSR scholars about the significance of CEOs’ characteristics in shaping a company’s CSR strategies. However, the precise mechanism underpinning this relationship is yet to be fully understood. We explore this mechanism by distinguishing different types of organizational identifications for a CEO. Furthermore, we explore how firms’ CSR practices differ with high and low levels of perceived importance of ethics by a CEO.

To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility

To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility

Do ESG controversies moderate the relationship between CSR and corporate financial performance in oil and gas firms?

The oil and gas industry is enmeshed in a continuous debate regarding the negative impact that its activity has on the sustainability of the environment. Increasingly, the market and stakeholders are positively evaluating those firms which are socially responsible and penalizing those that are not. Literature has analyzed the market view through the Environmental, Social and Governance (ESG) controversies and their relationship with Corporate Financial Performance (CFP), as well as with Corporate Social Responsibility (CSR) strategy. This study analyzes the influence of ESG controversies as a moderating variable on the relationship between Environmental, Social, and Governance factors and Corporate Financial Performance from a market valuation perspective. To perform this analysis, PLS-SEM structural equations have been applied to a sample of 264 oil and gas firms globally. The results confirm the moderating influence of ESG controversies on the relationship between E, S, and G factors and Corporate Financial Performance.

Do foreign institutions avoid investing in poorly CSR-performing firms?

We examine the impact of corporate social responsibility (CSR) on the investment decisions of foreign institutional investors. Using institutional investor holdings data domiciled in emerging markets, we find a positive and economically significant impact of firm CSR performance on foreign institutional ownership. We further document that independent foreign investors are affected by firm CSR performance, while gray foreign investors do not consider firm CSR performance when forming portfolios. Cross-sectional tests indicate a more potent positive impact of CSR on foreign institutional investor holdings for firms domiciled in countries with stronger disclosure and better governance. Moreover, investors domiciled in countries with common law consider firm CSR performance when forming portfolios. The results are robust to exogenous shocks, instrumental variable tests, and alternate specifications.

Corporate Social Responsibility and Financial Performance of Firms. A Case Study of Greek Companies in Athens, Greece

Corporate Social Responsibility and Financial Performance of Firms. A Case Study of Greek Companies in Athens, Greece

Charitable CEOs and employee protection

In the recent surge of Environmental, Social and Governance (ESG) development, one focus is on human rights protection, while another is continuous strengthening of corporate governance mechanisms. Our study explores these by collecting data on the employee communication from firm corporate social responsibility (CSR) reports and collecting firm practices on employee protection, to examine their association with CEO charitable donations. We posit that a firm with a charitable CEO is likely to have more favorable employee protection policies. Our study of the firm's execution of labor friendly policies and communications shows that charitable CEOs are associated with lower wage inequality, more female workers, higher rate of parental leaves, fewer labor-law violations, better environmental sustainability and better corporate governance. Our results show that CEO behaviors related to empathy increase beneficial treatment of employee and firm's human rights practices.