Corporate Social Responsibility Investment Research Articles

Corporate social responsibility, business strategy and governance performance

PurposeThis study aims to examine the effect of corporate social responsibility (CSR) adoption on differentiation and cost leadership strategies and how governance structure moderates this CSR–strategy relationship.Design/methodology/approachThe study data were retrieved from Thomson Reuters for non-financial firms between 2013 and 2019, and a fixed-effects panel regression analysis was executed.FindingsThe results indicate that CSR fosters cost leadership strategy but weakens differentiation strategy. This result supports the value generation school for cost leaders but also confirms the agency theory perspective for differentiators. Moreover, the governance structure does not moderate the relationship between a firm's CSR engagement and its business strategy, which implies a lack of corporate policies that concurrently consider both its CSR investment and strategies.Research limitations/implicationsThe findings of this study imply that cost leaders can integrate CSR practices into their business strategy and use their CSR engagement to increase their competitive position by stimulating cost efficiency and creating greater turnover. On the contrary, for differentiators, there is a trade-off between environmental and social engagement and business strategies. Thus, they are advised to enrich their unique product development abilities through the integration of environmental and social practices and reinforce their competitive position by addressing stakeholders' interests. The practical implication of the moderation analysis is that there is no rooted corporate policy behind the connection between CSR and firm strategy for both cost leaders and differentiators, which constitutes a missing link.Originality/valueThe findings of this study are of critical importance for firms, offering justification for the integration of two vital perspectives: social and environmental sustainability and financial sustainability. The moderating effect of governance performance tests the upper echelon's role in maintaining both sustainability perspectives concurrently and strengthening the legitimacy of the firms in society. Although maintaining a business strategy is important for shareholders' interests, pursuing a social and environmental sustainability strategy is crucial for meeting the expectations of all stakeholders.

Changing consumer attitudes to make the Corporate Social Responsibility investment in sustainable fish production, a worthwhile investment to corporates

AbstractThe need for environmental protection, especially of depleting natural resources such as fish stocks, remains a global challenge. Global population growth increases food consumption. Some socially responsible corporate entities in the fish sector are producing and selling sustainable fish products, but beyond meeting their altruistic motives, they need consumers to respond favorably to these CSR initiatives to make the investments worthwhile and to encourage more organizations to invest in CSR for sustainable development. This paper reports the findings of research on the factors which influence consumers in the emerging market of South Africa, to respond favorably to sustainable fish product CSR initiatives. A causal research design and quantitative method was employed with a sample of consumers who were part of the South African LinkedIn community and who eat fish, whether concerned or not about sustainability. An online questionnaire was developed using an extension of the Theory of Planned Behavior. Univariate, regression and mediation analyses were carried out. Attitude towards sustainable fish products was found to be the only significant predictor of intention to purchase sustainable fish but it was also found to mediate the impact of health consciousness and environment concern. This paper thus focuses specifically on the role of attitudes in sustainable fish consumption in South Africa. Recommendations are provided for improving these consumer responses so as to make these CSR investments worthwhile to corporates and thus also positively impact fish sustainability.

The social determinants of CSR practice: Between headquarters policy and local mobilization

In this article we examine the social determinants of CSR practices by mining firms in the territories where they exploit resources. We argue that mining firms are caught between headquarters policy on CSR, and demands emanating from locally-based societal groups. Headquarters policy provides a process-based framework for engaging with stakeholders, a menu of favoured activities, and guidance on issues of global or home-country salience. But social mobilization explains the intensity of corporate social responsibility (CSR) investments and the timing of spending. We situate the analysis within the literature on the influence of social movements on policy implementation. The empirical evidence for the paper is based on a comparative case study of the influence of activists over corporate social responsibility policy and practice in the mining sector in Chile and Argentina, using both secondary sources and primary field research.

Corporate Social Responsibility and Profitability of Listed Oil Firms in Nigeria

Purpose: Corporate social responsibility (CSR) activities are crucial for the cordial relationship between the business and the community, and despite the cost involved in CSR investments such relationship may have favourable consequence on community patronage and financial outcome. This study investigated the effect of CSR activities on the profitability of oil firms listed in Nigeria by ascertaining how community development costs (CDC) and employee benefits are associated with the financial performance of the firms. Methodology: Data on the study variables from thirteen oil and gas firms were collected over a period of twenty-one years (1998 to 2018), and analysed using a heteroscedasticity and autocorrelation-consistent regression technique to determine the effect of CSR activities on the financial performance of the sampled firms. Findings: The results showed that community development cost (CDC) had a significant positive effect on profitability. Employee benfits also have similar effect on financial performance. These findings indicate that investing in CSR activities ultimately has a favourable impact on corporate financial performance. Accordingly, the study recommended that oil firms should increasingly invest in employee welfare and community development projects in Nigeria. Originality/Value: This paper used a data set drawn from almost all the listed oil firms in Nigeria over a relatively long time span. The results support the usefulness of CSR activities to corporate entities, thereby encouraging oil firms to conduct more CSR investments in Nigeria.

Religion and Belief Discrimination at Work: Legal Challenges in the UK

The importance of corporate social responsibility (CSR) activities has increased in recent years. More undertakings active on different markets are becoming aware of the importance of improving labour policies, investing in safety training of employees, environmental protection, local community-related projects, volunteering, and charitable activities. At issue is whether higher degrees of competition associated with periods of economic crisis will affect the degree of competition on the market in a favourable or a non-favourable manner. Based on statistical data currently available, this paper will analyse whether higher levels of competition will increase investments in CSR activities to create trustworthy firms that will survive even in economically harsh periods, or will otherwise reduce the aforementioned types of investments and thereby facilitate the flourishing of anticompetitive practices on the market. This paper will first start with a short presentation of the concept, importance and meaning of corporate social responsibility, followed by considerations related to the importance of ethics in competition law. Finally, the author will analyse the impact of competition on CSR-related activities and the ways in which the pressure of competition can impact on CSR investments. Keywords: Corporate social responsibility; Competition; Anticompetitive practices; CSR activities; CSR investments

Pretending to be Socially Responsible? The Role of Consumers’ Rewarding Behaviour

Extant evidence on corporate social responsibility (CSR) shows that consumers are willing to pay a premium if they infer that the firm is truly "prosocial" (i.e if it is altruistic), but their valuation of the product will not increase as much (and may even decrease) if they believe the company has an ulterior motive for CSR (i.e. if the firm is opportunistic). We pose that the CSR level of investment can be strategically used as a signalling tool to help consumers identify the true nature of the firm and solve this incomplete information problem. Using a signalling game, where altruistic firms want to express their nature and opportunistic ones want to conceal it, we explore the relative effectiveness of consumers’ premiums and penalties (expressed as demand increases or decreases, respectively) in the promotion of corporate truth-revealing behaviour. We also characterize the conditions for market equilibria in which altruistic firms are distinguished from opportunistic ones, allowing consumers to solve the information asymmetry and, with that, influence firms’ profits. Contrary to what might be expected, we show that rewards for altruistic CSR and penalties for opportunistic CSR are not symmetrically effective. Our results help companies to improve their CSR decisions, by understanding how consumers solve the information asymmetry regarding the true nature of the CSR investments. Especially for altruistic firms, this may be important to guarantee that CSR effort and expenses are not just a cost but turn into higher revenues and profits.

The interplay of CEO ability and governance robustness on the performance effects of corporate social responsibility

PurposeThis study aims to investigate how the association between corporate social responsibility (CSR) and firm performance, documented in prior research, is affected by the joint effects of managerial ability and attributes of the firm's governance structure.Design/methodology/approachUnbalanced panel contains the essence of cross-sectional time-series data. A significant F-test proves the inappropriateness of pooled OLS regression to the sample. Further, the rejection of the Hausman test null favors fixed-effects over random-effects. However, statistically significant results from Shapiro–Wilk test, Breusch–Pagan test and Wooldridge test reveal non-normal distribution of the dependent variable, the presence of heteroscedasticity and the existence of first-order autocorrelation, respectively. Thus, this study applies feasible generalized least squares with panel-specific autocorrelation structure (hence, a slightly smaller sample) controlling for heteroskedasticity to all models after lagging all the explanatory variables by a year.FindingsThis study finds that higher levels of managerial ability enable firms to benefit more/less from their CSR investments depending on the presence/absence of appropriate governance devices. While CEO ability may be seen as an indicator of how well the CEO might serve the firm in the market-domain strategies, the results suggest that this may not be the case in the non-market domain in the absence of appropriate governance mechanisms.Originality/valueThe arguments and analyses in this study support two important contributions to the growing literature on CSR. First, the current study is one of the few to identify CEO ability as an important factor that may influence the dynamics of the firm's CSR (see also Garcì-Sànchez et al., 2019 and Yuan et al., 2019). Second, this study examines whether governance robustness minimizes the potential for opportunistic behavior of more able CEOs or constraints the effectiveness of more able CEOs in decisions pertaining to CSR.

Under rising environmental uncertainty Chinese enterprises pursue fame or profits? Evidence from corporate social responsibility and financial investment

PurposeThe purpose of this study is to evaluate the impact of environmental uncertainty on corporate social responsibility (CSR), and involves corporate financial investment as mediating factor into this relationship to identify whether Chinese enterprises pursue fame or profit under rising environmental uncertainty.Design/methodology/approachData of listed companies in China from 2010 to 2019 are employed. Fixed effect and mediating effect models were used to explore the relationship between environmental uncertainty, corporate financial investment, and CSR. The heterogeneity influence and moderating effect are discussed by using the method of grouping test and adding interactive items.FindingsThe study finds that rising environmental uncertainty has a negative impact on CSR. It stimulates managements' short-sighted motivation, so that enterprises prioritize financial investment that can solve short-term goals, rather than CSR performance. This inhibitory effect is caused by holding illiquid financial assets with the motivation of “speculative profit seeking.” The negative effect is greater in the samples of state-owned enterprises, nonfamily enterprises and enterprises with low risk-taking.Practical implicationsIt provides a decision-making direction for implementation of CSR governance and the construction of CSR system, particularly in emerging market economies.Social implicationsCSR is widely known in developed countries for its formation, development and role, but its effectiveness and behavioral motivation are less mentioned in emerging markets. In the future, the research in this area needs to be further advanced.Originality/valueThe study makes significant contributions to the mechanisms behind the link between environmental uncertainty and CSR by taking corporate financial investment as an intermediary factor into the analysis, especially in the unique market context of China.

How does social responsibility investment strategy contribute to hospitality firms’ recovery from public health emergencies? The case of COVID-19 pandemic

Using fuzzy-set qualitative comparative analysis, this paper explores which configurations of six dimensions of hospitality firms’ corporate social responsibility (CSR) result in higher (or lower) levels of total factor productivity. We demonstrate that different categories of stakeholders and hospitality firms’ dynamic capabilities complement each other under the framework of configurational theory. The result shows that: 1) The CSR dimensions of product quality, CSR communication, and environmental protection are critical to high levels of firm performance; 2) After the pandemic, hospitality firms should make investment in CSR communication and environmental protection a priority; 3) Hospitality firms’ choice to invest in a specific combination of dimensions of CSR practice should depend on their overall level of corporate governance (high or low). This paper contributes to the strategic management and corporate governance literature by identifying the role of hospitality firms’ governance on the linkage between CSR investment strategy and firm performance.

Board interlocks, career prospects and corporate social responsibility

AbstractThis paper investigates how director career concerns affect the relation between board interlocks and corporate social responsibility (CSR). We first document that firms with central or well‐connected boards of directors tend to invest more in CSR. We then show that the positive relation between board connectedness and CSR is significantly more pronounced for firms whose directors' future careers would benefit more from CSR, such as those with better corporate governance, firms with larger investments in research and development or firms with high product market threats. Our findings suggest that director career concerns play an important role in the board of directors' decision on CSR investments.

Attunement theory, CEO's cyclical influence on corporate social responsibility and firm value

PurposeThis paper aims to further contribute to the growing stream of literature on the CEO's impact on corporate social responsibility (CSR). The authors shed light on the implications of attunement theory on which relatively less research has been done. Furthermore, this paper strives to reconcile contradictory findings of the effect of CEO tenure on CSR and use the immediate changes of CSR enacted by the new CEO upon firm value.Design/methodology/approachThe empirical strategy of the paper is centered around CEO transition. Applying first difference model, the authors identify a tenure-varying pattern of CEO influence on CSR. Moreover, the authors base the analyses of CSR value relevance on the sudden change of CSR during CEO transition, and use a within-industry matching approach as the inferential strategy. Manual data collection is conducted extensively for robustness checks.FindingsThe authors find that CSR activities change drastically at the beginning of the new CEO's ascendancy. One exception to this general pattern of CSR policy change is when the new CEO is brought from outside the organization, a result supporting the attunement theory. The authors find that firm value increases (decreases) when the new CEO increases (decreases) the CSR investment above (below) the industry norm.Originality/valueThis paper is among the first ones in the extant literature that directly examines the analytical implications of attunement theory concerning the CEO's impact on the firm's CSR policies. Furthermore, the positive association between CSR and firm value corroborates the arguments of instrumental stakeholder theory.

Corporate Social Responsibility and Value of Industrial Goods Manufacturing Firms in Nigeria

Purpose: The aim of this study is to determine how corporate social responsibility (CSR) practices can influence the corporate performances of listed firms in the industrial goods producing sector of Nigeria and other developing countries. Theoretical Framework: The enhancement of corporate value by CSR practices has become an interesting area of study for corporate managers and policy makers globally. The Stakeholder and Business Ethics theories have been used for this study. However, we anchor this research on the stakeholder theory which Edward Freeman propounded in 1984 and use it to evaluate the influence of CSR on corporate value. Design/methodology/approach: The study uses the causal comparative research design and we purposively select a sample of four industrial goods firms from Nigeria’s listed manufacturing enterprises as at 31st December, 2021 based on their social responsibility relationships with the society, employees and creditors. We collect 19 years secondary data from the website of the Nigerian Exchange Group and yearly financial reports of the industrial goods producing enterprises. These data have been analysed using the ordinary least squares panel data regression, fixed and random effects models, stationarity test, cross-section dependence test the Hausman test. Findings: The results show that corporate giving, employee welfare package and creditor days have significant positive effects on return on assets (a proxy of corporate performance) suggesting that the threat to profit-maximization is not caused by CSR but by illegitimate use of CSR by rent-seeking corporate managers. Research, Practical & Social implications: The study helps in filling the gap in literature and serves as basis for the economic and social development of Nigeria, developed and other developing countries through a more legitimate CSR investments in corporate giving, employee welfare package and creditor settlement days. Originality/value: The value of the study is that evidence of CSR success in the industrial goods manufacturing sector has for the first time been established using a time scope of 19 years and a firm-year-observations of 228. This study supports the claim that CSR is not a threat to profit maximization since it has a strong relationship with corporate value.

CEO Greed, Corporate Governance, and CSR Performance: Asian Evidence

In this study, we examined the association between CEO greed and corporate social responsibility (CSR) performance with a particular emphasis on the curtailing role of corporate governance. We found that CEO greed has a negative effect on CSR, since an uncontrolled pursuit of personal gain typically reveals myopic behavior and the foregoing of investment in CSR by a greedy CEO. Additionally, we found that CEO compensation in the form of large bonuses, support, and restricted stocks options weakened the link between CEO greed and CSR. Concerning the power dynamics amongst CEOs (CEO duality and tenure), we found that CEO duality moderates the negative relation between CEO greed and CSR. We also explored the curtailing role of corporate governance (proxies represented by board gender diversity and board independence) in the association between CEO greed and CSR. Our findings show that gender diversity curtails the negative effect of CEO greed on CSR once it reaches critical mass on the corporate board. Gender critical mass also curtails the negative impact of CEO greed on CSR, even if the CEO exercises duality. Our findings have empirical and practical implications. This study contributes to the existing literature by exploring the relationship between CEO greed and CSR in Asia, a region not renowned for CSR performance. This study also provides evidence for the curtailing role of compensation and governance factors in the negative relationship between CEO greed and CSR.

Was CSR in our minds? The relevance of CSR in the vision and mission of Indian companies through the lens of ownership

PurposeThis study aims to explore the patterns of corporate social responsibility (CSR) practices and investments across different ownership groups and relevance of CSR practices in the vision and mission (V&M) statements of firms.Design/methodology/approachThe paper uses the neo-institutional theory approach, which explains similarities and differences in the CSR practices of organisations embedded within (and between) similar sectoral contexts. The study accounts the CSR activities of the top 100 companies listed on the Bombay Stock exchange (BSE) based on their ownership and checks the overlap of the CSR activities conducted by the companies with the ongoing social development schemes launched in India during the same of time. The time period between 2017 and 2020 is chosen to analyse the CSR studies. The study uses content analysis technique to derive conclusions. A textual analysis of top 100 listed firms across all ownership groups aimed at understanding patterns of CSR practices opted by the different groups and coherence of CSR patterns in the V&M statements. CSR related keywords were analysed in the V&M statements to understand what influence reporting of CSR practices in the strategic communication of firms.FindingsOverall analysis indicated that top 100 firms prefer to invest in the areas of “Education”, “Sustainability” “Skill” where public-owned firms preferred towards “Sanitation” and “Environment/Sustainability” showing concurrence with local development goals. Private and foreign groups preferred to park their CSR funds in “Education” and “Skill” development showing coherence with the global agendas. Public-owned firms tend to report more CSR related specifically “Environment’ and “Sustainability” in the strategic documents. However, private and foreign firms do not pay any significance to CSR related keywords in their V&M statements.Research limitations/implicationsFindings suggest that despite of huge CSR investments, private and foreign-owned firms lack CSR focus and communication in their V&M statements, which may create disintegration in the CSR investment and strategic alignment of near-term and future goals. The paper suggests that private and foreign firms should also communicate their CSR practices through their V&M to stakeholders so that CSR practices may not remain mere 2% mandated expenditure by the Government of India.Originality/valueThe study contributes in confirming the success of the CSR policy mandate in supplementing government’s social development programmes along with indications on the role of family firms in accelerating the process of community development as compared to foreign firms. The study also favours integration of CSR disclosures in the V&M statements to gain long-term benefit out of these investments.

Pricing and corporate social responsibility investment strategies for a manufacturer under information asymmetry

AbstractWe consider a supply chain comprising a dominant manufacturer and a supplier where both firms are socially concerned. The corporate social responsibility (CSR) cost of the supplier is private information. The manufacturer can determine its sales price before the supplier starts production (committed pricing) or postpone its pricing decision until after receiving components from the supplier (noncommitted pricing). Moreover, the manufacturer can determine its CSR investment level before (ex ante CSR investment) or after (ex post CSR investment) the supplier. Four scenarios are investigated to examine the optimal pricing and CSR investment strategies of the manufacturer. We find the following: First, under a noncommitted pricing strategy, the manufacturer always prefers ex post CSR investment. However, the reverse holds under the committed pricing strategy. Second, under the ex post CSR investment strategy, committed pricing benefits the manufacturer for most parameter combinations whereas noncommitted pricing benefits the manufacturer when facing consumers with high CSR awareness and low price awareness. Under the ex ante CSR investment strategy, the manufacturer always prefers committed pricing. Finally, the joint committed pricing with ex ante CSR investment strategy is optimal for the manufacturer.

The Moderating Role of Online Social Media in the Relationship between Corporate Social Responsibility Disclosure and Investment Decisions: Evidence from Egypt

Despite the spread and progress in the literature related to the disclosure of corporate social responsibility (CSR) performance around the world as one of the most essential tools for achieving sustainable development in society, its value relevance is still uncertain. Using a survey approach involving investors dealing in stocks of 60 enterprises listed on the Egyptian Stock Exchange (EGX) and included in the environmental, social, and governance index (S&P/EGX ESG index) and the equal-weight index (EGX100 EWI index), we empirically examine the importance of CSR financial performance disclosure by examining the extent to which it can influence investors’ choices. In addition, we assess whether company reputation acquired through online social media (OSM) influences the extent to which CSR performance disclosure influences such judgments. To examine these matters, we conduct two tests: the first examines the influence of disclosure of company environmental activities on investors’ decisions and the other examines the influence of disclosure of company social activities on investor decisions. Turning to our key results, we find that investment decision makers in both experiments tend to invest only in companies that have higher CSR performance scores. In the context of OSM, we provide and discuss empirical evidence that investment decision makers are more responsive to investing in companies included in the S&P/EGX ESG index, which have a positive e-reputation for CSR performance, than companies included in the EGX100 EWI index, which do not have such a reputation, which confirms that e-reputation, as one of the most important outputs of OSM, has a marginal impact on investment decisions and moderates the relation between disclosure of high CSR scores and investors’ decisions. Therefore, this paper presents a modern starting point for CSR experts and academics, particularly in the emerging markets. In general, our paper expands the CSR-related investment literature. In line with the affect-as-information theory, our paper also expands the OSM literature by indicating that the effects of OSM depend on the information context, where failure to provide information to investors or other stakeholders in a timely manner may render the information useless.

The Impact of Corporate Social Responsibility (CSR) and Green Investments on Sustainable Performance: The Mediating Role of Firm Financial Performance

Several academics have looked at the current and future paths of sustainable development through the lens of green investment and corporate social responsibility (CSR) investment. Few people have looked into the links between green investments, CSR investments, and long-term success. Most of these studies have been about how CSR affects a company's bottom line. Sustainable performance is founded on triple- bottom-line thinking, also known as the people-planet-profit axis. 130 manufacturing companies that have been registered on the Pakistan Stock Exchange between 2019 & 2021 made up the sample for this study. The analysis reveals that investments in CSR (corporate social responsibility) and environmental preservation boost financial and long-term sustainability. On the other hand, financial performance doesn't change much when it comes to sustainable performance. Additionally, the impact of green investments on sustainable performance is mediated by financial performance. However, CSR investment cannot be mediated by financial success

Market reaction to firms' investments in CSR projects

PurposeThe purpose of this paper is to determine the impact of corporate investments in corporate social responsibility (CSR), measured by the environmental, social and government (ESG) rating, on the market valuation of a firm's stocks and to explain the regional differences in the degree of this influence.Design/methodology/approachThe empirical study uses linear and non-linear panel regression models for a panel sample of 951 firms listed in Asia, North America and Europe operating in innovative industries.FindingsThe CSR score was found to be significant in terms of stock excess return on the regional level. However, this finding cannot be extrapolated to the global scale. ESG rating is priced by the European and North American markets negatively, while in the Asian market, it is positive. This penalty (negative influence) is greater than the reward for one point increase in ESG rating.Practical implicationsThe results of this empirical study could be used by firms' managers to adjust strategies aimed at stock value growth and by investors to select an investment strategy to maximize return.Originality/valueThe impact of investments in CSR on stock excess return over a defined benchmark is assessed. The study reveals regional differences in the impact of CSR investment using a sample of Asian, European and North American firms. The authors apply a more advanced lagged CSR performance (d.ESG) assessment based on the methodology of Zhang and Rajagopalan (2010).

The interplay between corporate social responsibility and knowledge management strategies for innovation capability development in dynamic environments

PurposeThis paper aims to analyze unexplored connections between economic, environmental and social dimensions of corporate social responsibility (CSR) and knowledge management (KM) strategies (exploration, exploitation), also considering environmental dynamism as an influencing variable on these connections. The predicted CSR-KM interplay suggests, from stakeholder and knowledge-based views of the firm, the existence of ideal configurations between CSR and KM strategies that generate differentiated impacts on companies’ innovation capabilities, especially in dynamic environments.Design/methodology/approachStructural equation modeling by means of the partial least squares technique was used to test the study’s hypotheses after collecting survey data from Spanish companies of the renewable energy sector.FindingsThe study findings show that in highly dynamic environments, companies will tend to commit prominently in CSR, although their orientation (economic, environmental, social) and effects on innovation capabilities will depend mainly on the selected KM strategies. Social and environmental CSR are found to be highly related to KM exploration, whereas economic CSR is highly related to KM exploitation. Nevertheless, while a significant indirect effect of economic CSR by means of the KM exploitation strategy on innovation capabilities is found, the proposed indirect effect of both environmental and social CSR through the KM exploration strategy on innovation capabilities is not significant.Practical implicationsThe results suggest that company managers should be aware of the advantages of following specific paths of investment in KM and CSR initiatives in highly dynamic environments, as there is a potential payoff in terms of innovation capability improvement. The results also suggest that “good” relationships with stakeholders, built from specific CSR investments, make firms able to get valuable knowledge that it is useful to develop KM strategies for innovation capability development.Originality/valuePrevious studies do not consider the interplay between KM strategies and CSR as a catalyzer for developing a firm’s innovation capabilities. This paper contributes to the KM and innovation literatures by introducing CSR into the conversation about how to improve innovation capabilities in dynamic and sustainable industries by using configurations of KM strategies and specific CSR investments in economic, social and environmental areas.

CEO overpower and corporate social responsibility of commercial banks: The moderating role of state ownership

This study examines the impacts of powerful CEOs and state ownership on commercial banks’ corporate social responsibility (CSR) in Vietnam, a transitional market in Asia. Given the differences between emerging and developed markets in terms of their institutions and governance, it is essential to explore the impact of CEO power on CSR disclosure in emerging markets. This study collects data from 37 Vietnamese commercial banks from 2010 to 2020. We employ a dynamic system Generalized Method of Moments to overcome endogeneity and heterogeneity issues. The findings show that powerful CEOs negatively reduce CSR programs. CEO power tends to focus less on CSR investments because CSR expenses reduce the operating free cash flow. Meanwhile, our findings indicate a positive relationship between state ownership and CSR developments. This study reports a moderating role of state ownership in empowering powerful CEOs to develop CSR programs in commercial banks. We also perform a robustness test to confirm the persistence of our main findings across subsamples by CEO ages. Our robustness test results indicate that CEOs have the lowest motivation to improve CSR when their ages are from 40 to 60. Our findings align with agency theory, stakeholder theory and prior literature. Finally, our study contributes practical implications for management and policymakers to develop CSR programs sustainably.