Level Of Corporate Social Responsibility Research Articles

Assessment of parent-subsidiary companies’ geographical distance effect on corporate social responsibility: a case of A-share listed companies

Corporate Social Responsibility (CSR) is considered as an important business agenda in the current age. Based on the data of A-share listed companies from 2010 to 2020, this study used a fixed-effect model, heterogeneity analysis and intermediary effect test to investigate the relationship between parent-subsidiary geographical distance and CSR. Our study findings revealed that the parent-subsidiary companies’ geographic distance has a negative effect on CSR. Results of our study further indicated that the effect was more stronger for non-state-owned enterprises and the firms in the eastern region. Findings of our study also reported that the enterprise internal control had an obvious mediating effect in the association among parent-subsidiary companies’ geographic distance and CSR. The government needs to reinforce legal construction, actively guide enterprises to perform CSR through incentive measures, and implement special supervision on enterprises with a large number of subsidiaries. This study not only enriches the literature on the factors influencing corporate social responsibility but also provides a theoretical perspective and important ideas for the effective implementation of regional diversification and the improvement of CSR levels in practice.

The relationship between firm complexity and corporate social responsibility: International evidence from 2010–2019

AbstractExtant research on the relationship between firm complexity and corporate social responsibility (CSR) is limited to employing size variables as indicators for firm complexity. Following a contingency approach and to fit the multidimensional nature of CSR, in this study we define complexity as the structural complexity of a firm. To answer the question of whether firm complexity influences CSR, we study firms included in the major world stock indices for a 10‐year period by means of a fixed‐effects regression. Findings generally suggest a higher level of CSR in more complex firms. A more detailed analysis of complexity points toward a significant positive influence of the vertical, functional, and occupational dimensions of complexity but finds no link between spatial differentiation and CSR. This research represents the first empirical study that examines the relationship between CSR and structural complexity beyond a simplistic proxy of size.

MODERN APPROACHES TO ENTERPRISE CORPORATE SOCIAL RESPONSIBILITY EVALUATION

Purpose. Corporate social responsibility (CSR) is an important feature of modern business. It provides a certain level of voluntary response to social problems, compliance with moral requirements of society. Companies have already realized the benefits of a socially proactive position and are increasingly involved in solving social and environmental problems. This raises the issue of CSR evaluation from a cost / benefit standpoint. The aim of the article is to study the existing approaches to assessing the level of CSR and determine the scope of their use. Design/methodology/approach. Abstract and logical method was used for generalization of theoretical and methodological provisions for the assessment of CSR. A systematic approach was used to form a system of ESG-indicators and to develop a system of indicators for assessing the benefits of implementing CSR activities. Economic and statistical methods were used for the assessment of CSR Ukrainian companies. Finding. The article presents the key characteristics of CSR. The focus is on the positive impact of the implementation of CSR practices on the activities of companies. A critical analysis of the approaches of Ukrainian scientists to the assessment of CSR was made, which allows to distinguish the assessment of CSR in general and the effectiveness of CSR activities. The authors identified three methodological approaches to the assessment of CSR. A general description of these approaches is given, their advantages and disadvantages are identified. The authors note that there is no universal form of financial reporting, businesses have a choice of what form it is. The most common are sustainable development reports, which are formulated for GRI standards. More Ukrainian companies publish their social reports, thus declaring their commitment to CSR concepts. It is proved that CSR is gradually transformed into a system of environmental, social and management parameters - ESG. The content of ESG-factors is determined and a system of indicators in the context of ecological, social and management spheres is formed. The system of indicators for assessing the benefits of implementing CSR activities is formed. A special place in the article is given to the international rankings of companies according to their ESG indicators. Based on the data of the catalog of social initiatives of companies, the general state of CSR in Ukraine is analyzed. It is established that the development of CSR in Ukraine is in line with European trends. The modern practice of social responsibility assessment is systematized. Practical implications. The practical significance of the obtained results is to develop the theoretical and methodological basis for the assessment of CSR. The results of the study can be used by entrepreneurs and managers seeking to achieve long-term success in the global business environment. Originality/value. The theoretical basis of CSR evaluation is developed by distinguishing three groups of methodological approaches, including analysis of non-financial reporting, calculation of quantitative and qualitative indicators, as well as index and rating methods. A system of indicators based on the maximum consideration of stakeholders' interests has been developed to assess the benefits of CSR activities.

An examination of board diversity and corporate social responsibility disclosure: evidence from banking sector in the Arabian Gulf countries

PurposeThe purpose of this study is to examine the impact of board diversity (e.g. education, gender, nationality and royal family members) on voluntary corporate social responsibility (CSR) disclosure for a sample of banks listed in the Arabian Gulf Council countries.Design/methodology/approachThe authors use the Global Reporting Initiative guidelines to construct the CSR disclosure index. The empirical analysis is based on the data of banks listed in the Gulf Cooperation Council countries over the period 2011–2019. To tackle the potential issue of endogeneity, the authors apply the system generalized method of moments (GMM) estimation approach to investigate the relationship between board diversity and CSR disclosure index.FindingsThe findings of the analysis show that there is a significant relationship between board diversity and the level of voluntary CSR disclosure. Specifically, the authors find that diversity captured by the education level, nationality and the presence of royal family members on board is positively associated with the level of voluntary CSR disclosure while diversity captured by the gender of board members is negatively associated with the level of voluntary CSR disclosure.Practical implicationsThe regulators, policymakers, stakeholders and the board of directors become aware of the diversity mechanisms that must be used to promote CSR practices in the banking sector of Arabian Gulf countries.Originality/valueThe authors extend the existing literature by providing empirical evidence on the association between board diversity and voluntary CSR disclosure practices of banks operating in the Arabian Gulf countries. This study also highlights that board gender diversity may have a different impact on voluntary CSR disclosure between developed countries and developing countries. This paper also provides preliminary evidence on the importance of education level, the presence of foreign and royal directors on board to influence CSR practices of banks operating in the Arabian Gulf countries.

Corporate social responsibility performance and the reputational incentives of independent directors

AbstractWe link the reputational incentives of independent directors in the labor market to firms’ corporate social responsibility (CSR) performance. We show that when a larger fraction of a firm's independent directors considers the firm more prominent, the firm has better CSR performance. This association is more pronounced for firms that are more visible and those that face greater external CSR pressure. Such firms are also more likely to (1) issue CSR reports and obtain independent assurance on those reports; (2) include CSR items in annual general meeting agendas; (3) invest in the optimal level of CSR. Finally, we show that an independent director is more likely to gain directorships if the CSR performance of their most prominent board improves. Our results are robust to controlling for firm fixed effects and when using plausibly exogenous shocks to the reputational incentives of independent directors. Overall, our results are consistent with our conjecture that the reputational incentives of independent directors have a positive influence on firms’ CSR performance.

Can SMEs in the food industry expect competitive advantages from proactive CSR when CSR trade-offs exist?

PurposeThe study aims to examine the effects of proactive vs passive environmental corporate social responsibility (CSR) in the context of small and medium size enterprises (SMEs), factoring in the moderating effects of price and the mediating effects of company–consumer identification(C-C identification) on consumer responses.Design/methodology/approachAn experiment with general consumer samples was conducted. A randomized 2 (CSR levels: proactive CSR vs passive CSR) × 2 (price as a CSR trade-off: higher price vs lower price) full factorial design was used.FindingsThe study findings revealed that proactive environmental CSR not only engendered more positive C-C identification but also resulted in more favorable consumer attitudes, stronger supportive communication intent and purchase intent. In addition, when a company demonstrates proactive CSR, consumers' C-C identification is generally positive irrespective of price differences, and in turn, more positive reactions follow. When a company takes a passive approach and offers lower prices, respondents showed significantly less positive C-C identification, and less favorable responses. This indicates that passive environmental CSR programs can potentially backfire, especially when combined with lower prices. This study also shows the important mediating impact of C-C identification on consumer responses.Originality/valueThis study is one of the few to explore consumer perceptions of and reactions toward the food industry's environmental CSR programs by degree of CSR involvement and price differences in the context of SMEs. This study's findings provide useful information to SME managers and public relations practitioners who work closely with SMEs, allowing them to make informed strategic decisions, especially when they evaluate the extent of their company's commitment to environmentally proactive CSR practices and its communication to consumers.

Corporate Social Responsibility, Audit Committee Expertise, and Financial Reporting: Empirical Evidence from Korea

Corporate social responsibility (CSR) involves multiple activities and is influenced by the cultural and legal environment of the country in which a firm is located. This study examines the role of audit committees’ (AC) financial expertise in the relationship between CSR and the earnings quality of Korean firms with high levels of CSR. Using a multivariate analysis, it investigates whether the ACs that include members with accounting expertise, finance expertise, or supervisory expertise individually affect a firm’s decision making. It also examines how ACs with diverse expertise contribute toward improving the financial reporting quality of firms with high levels of CSR. The results demonstrate that when there is a certified accountant in the AC of a firm that practices CSR based on ethical motivation, the earnings management through discretionary accruals is more strictly controlled. This is more effective when the AC comprises members with accounting and non-accounting expertise. This finding implies that the AC plays a positive role in improving the accounting information quality of firms with CSR excellence. Moreover, while the role of accounting experts in the AC is important for maintaining high earnings quality, combining other types of expertise creates synergy.

Development of Corporate Social Responsibility in Business as a Factor of Fiscal Decentralization

The study aimed to substantiate the nature of the influence and sustainability of corporate social responsibility (CSR) on the effectiveness of the fiscal decentralization of local government in Ukraine. The estimates of CSR indicators for 490 enterprises were obtained using the questionnaire results. Determined the structure of directions for implementing a socially-oriented approach in Ukrainian business. Functions of dependence of indicators of the effectiveness of financial decentralization of local authorities on CSR development were constructed using linear regression methods and considering the time lag. We have identified a stimulating but not sustainable impact of business CSR on increasing the financial base of local budgets in decentralization. The time lag hurts the growth of the company's tax payments due to the growth of CSR level. The results obtained can be used to form efficiency strategies of local government to initiate CSR development in businesses.

CSR portfolio characteristics and performance outcomes: examining the impacts of CSR portfolio diversity and dynamism

PurposeThe purpose of this paper is to introduce and test a portfolio view of a firm’s corporate social responsibility (CSR) activities. Drawing from stakeholder theory and the dynamic capabilities literature, the authors introduce CSR portfolio diversity and dynamism as key portfolio characteristics that have differential impacts across short- and long-term performance contexts.Design/methodology/approachThe study draws from the Kinder, Lydenberg and Domini database to examine CSR portfolio diversity and dynamism across seven dimensions of CSR activities. The authors test the direct and indirect relationships between CSR portfolio characteristics and both short- and long-term performance outcomes to assess the opportunities and challenges associated with managing a diverse and dynamic CSR portfolio.FindingsThe findings suggest that a diverse portfolio of CSR activities positively impacts long-term performance; however, CSR portfolio diversity yields negative performance outcomes in the short-term. The authors also find that CSR portfolio dynamism moderates the relationship between CSR level and firm performance, such that a dynamic portfolio of CSR positively moderates the relationship between a firm’s CSR level and long-term performance; however, it negatively moderates the relationship between CSR level and short-term performance.Originality/valueThis study integrates insights from the literature that examine the independent effects of individual CSR activities and the broader perspective that assesses the aggregated summation of CSR activities in relation to firm performance. By taking a portfolio perspective, the present study provides a unique integration of these two research streams to examine the performance implications of engaging in a diverse and dynamic range of CSR activities.

CSR assurance practice and financial distress likelihood: evidence from India

Purpose The purpose of this study is to examine the effect of corporate social responsibility assurance practice (CSRAP) on the financial distress likelihood of listed firms in India. It uses the signalling theory to interpret the relationship among the variables of the study. Design/methodology/approach The study used the Indian stock market as the testing grounds and applied probit and panel probit regression to examine the data set with 800 firm-year observations from 2010 to 2019. Findings The study’s first findings show that firms with an assurance service have a negative correlation and are less likely to stay in financial distress situations for an extended period. However, corporate social responsibility (CSR) assurance has a positive but weak correlation with insignificance with financial distress likelihood of firms in India. The authors also find that the engagement of CSR assurance and level of assurance (limited assurance) does not cause a change in a firm financially distress likelihood of firms in India. However, as assurance service providers, auditing firms are more likely to reduce a firm’s likelihood of financial distress. Finally, the study shows that CSRAP (CSR assurance, assurance service providers and level of assurance) does not moderate the association between CSR expenditure and financial distress likelihood of listed firms in India. Originality/value The study findings are the first to examine the level of assurance and financial distress of firms according to the authors’ knowledge. This study also adds new knowledge to the factors that cause or reduces the financial distress of listed firms, including CSRAPs.

Environmental policies with consumer-friendly firms and cross-ownership

This paper analyzes what environmental policy is implemented by governments when there is cross-ownership between polluting firms that care about social concerns. We compare the equilibrium outcomes under environmental taxes, tradable emission permits and emission standards. We find that the concern of firms about corporate social responsibility (CSR), which is decided endogenously, depends on the environmental policy implemented by the government. The greatest concern is obtained under tradable emission permits and the lowest under emission standards. We also find that cross-ownership between firms affects the CSR level that they choose. Finally, social welfare is at its highest with tradable permits and at its lowest with an emission standard, implying that the government prefers, when possible, to set tradable emission permits rather than the other two policies.

Do Socially Responsible Firms Foster Socially Responsible Citizens? Social Distancing under Covid-19

The literature on the interplay between geographic communities and organizations has largely ignored the role of individual residents. In adopting a meso-perspective, we examine a potentially vital relationship between corporate conduct and pro-social behavior demanding sacrifice from individuals. Drawing on Weber (1922), we theorize that organizations in a community legitimize personal social conduct in three ways – by serving as role models, imparting norms and values, and routinizing forms of interaction. We study the relationship between corporate social responsibility (CSR) behavior by local firms and the social distancing (SD) of citizens in US counties during the Covid-19 pandemic, a core ethical outcome. We argue and find that the residents of communities in which firms exhibit higher levels of CSR engaged in more SD during the Covid-19 pandemic. This was true when firms were a) long-established, b) isomorphic in their CSR, and c) major employers and vendors. Moreover, CSR relating to the treatment of employees and positive and negative extremes in CSR had an especially strong effect on SD. Implications are drawn for the study of business ethics, as modeled by CSR, as a force for ethical personal behavior and public health in communities.

The Influence of Corporate Governance and Corporate Foundations on Corporate Social Responsibility (CSR) Reporting Practices

ABSTRACT This study investigates whether corporate governance and corporate foundations have any influence on corporate social responsibility (CSR) reporting practices in the context of a developing country – Mauritius. Data were collected from Mauritian listed companies for the period of 2007–2014. Content analysis was used to assess the extent of CSR reporting. Multivariate regression was used to investigate the three research hypotheses. It was found that firms which contribute to a CSR foundation, generally report a higher level of CSR information provision. Conversely, state ownership has a negative influence on the level of CSR reporting while board independence had no significant influence on CSR reporting. This study contributes to the literature by shedding light on less explored intrinsic drivers of CSR reporting. While the role of extrinsic drivers (e.g. institutional obligations) remains relevant, it is only through an organizational/management commitment to ethical and social issues that substantive embedding of positive managerial attitudes toward CSR and stakeholder will occur.

Enhancing the organisational commitment of public sector accounting staff through the pursuit of CSR objectives

PurposeThis study aims to examine the interrelationship between the employee public service motivations (PSM), organisational corporate social responsibility (CSR) objectives and employee organisational commitment amongst accounts department staff in public service organisations.Design/methodology/approachSurvey data is taken from tax accountants and accounts administration staff (n = 285) across seven South Korean state-owned enterprises involved in the provision of various public services (utilities, infrastructure, energy and housing). Structural equation modeling techniques are used to conduct mediation and moderated-mediation analysis.FindingsResults show that both employee PSM and organisational CSR are significant in determining organisational commitment, especially where they result in value congruence. The authors also find that perceived levels of internal and external CSR are significant in moderating the impact of different dimensions of PSM.Practical implicationsAs accounting in public service organisations faces growing professional and commercial demands to address stakeholder needs, the need for organisations to retain accounts staff with the necessary motivations is vital. The findings highlight the importance of value congruence in achieving long-term employee organisational commitment and the need for the CSR objectives of organisations to take account of both external and internal stakeholders.Originality/valueLittle research has examined the relationship between PSM and organisational commitment amongst accounting staff in the quasi-public/private state-owned enterprise sector. This despite the level of organisational (e.g. introduction of new public management approach) and professional change (e.g. regulatory changes) experienced over the past two decades and the importance of the sector in public service provision.

The Convergence between Sustainability and Conventional Stock Indices. Are We on the Right Track?

The growth of passive and socially responsible (SR) investment makes that sustainability indices play an important role in defining what constitutes a sustainable investment. In order to know the suitability of sustainability indices as benchmarks for SR investors, we used different linear regressions to compare the compositions of sustainability indices and their conventional counterparts and to compare the levels of corporate social responsibility (CSR) of both types of indices. We showed that the composition of sustainability indices gradually converged towards their conventional peers. Moreover, the difference between the CSR levels of both type of indices remained the same or even decreased over time. We concluded that a change in the weighting method of sustainability indices such as the equally weighted criterion would significantly increase the difference from their conventional counterparts. However, due to the relationship between CSR and size, this change would penalize the CSR level of the index. These results raise the question of whether SR passive investors will be able to meet their non-financial expectations as a consequence of the convergence.

Corporate social responsibility reporting of agriculture companies: evidence from Indonesia

This research investigates the extent of corporate social responsibility (CSR) reporting of agriculture companies listed on the Indonesia Stock Exchange (IDX). Specifically, this research attempts to compare the level of CSR reporting before and after the issuance of The Capital Market and Financial Institution Supervisory Agency (Bapepam LK) Regulation No X.K.6 in 2012 related to the content of CSR disclosure in the corporate annual report. This research also examines company characteristics, which may influence the extent of corporate CSR reporting, namely, profitability and firms size. The annual report of 12 agriculture companies for three years (2011 to 2013) was used as a sample. The CSR reporting level was analyzed using content analysis based on an index under the Global Reporting Initiative (GRI) G3 sustainability framework. The index consists of voluntary and mandatory disclosure under the X.K.6 regulation. The paired-sample t-test indicates that the CSR disclosure level increased in 2012, immediately after the regulation issuance (significant at 5 per cent level). When this study categorizes the disclosure into mandatory and voluntary, the results suggest that both disclosures after the new rule are greater than those before the rule comes. These results indicate that the new rule’s issuance imposes companies to do more CSR activities, thereby improving the company’s annual report’s disclosure level. In terms of factors influencing CSR reporting, size positively influence CSR reporting in the agriculture industry. The result indicates that the larger the firm, the more resources available for the firm to do CSR activities reported in the company annual report.

An Empirical Assessment of Corporate Social Responsibility in Banking Industry: Construct Development and Validation

Corporate social responsibility (CSR) is one of the responsibility practices for the organization to take care of and maintain a good relationship with its stakeholders. The corporate social responsibility includes the organization's responsibilities towards their various stakeholders like customers, shareholders, employees, environment, and community. In recent years CSR practiser and academicians put numerous efforts to measure the stakeholder perceive a level of CSR but it remains unclear how the stakeholder perceiving the CSR activities of the organization. The objective of the study is to construct and develop a CSR activities measurement scale for the banking industry. The development of the scale is based on the three-stage technique proposed by Churchill (1979). Through the literature review, the items for the CSR scale were formulated. Using these items survey was conducted in the banking industry. The CFA was done to know the reliability and validity of the scale and it found to be acceptable. The model fit was tested by using the Structural equation modeling (SEM) technique and the result of the model providing strong evidence to support the hypothesis.

Corporate Social Responsibility and Managerial Compensation: Further Evidence from Spanish Listed Companies

Ongoing regulatory efforts aim to link managerial compensation with a firm’s performance. However, little is known about whether and how Corporate Social Responsibility (CSR) goals are considered in the design of the managerial compensation scheme. This paper addresses this research question by analyzing a sample of Spanish listed firms for the period spanning 2013–2018. The outcomes of the regressions suggest that there is a positive relationship between CSR and the managerial compensation, but this relationship is significant only with lower levels of CSR. The study also reveals that CSR is positively associated with the proportion of equity-based compensation and, therefore, negatively associated with the proportion of cash-based compensation. In all, our results suggest that firms with lower levels of CSR, likely following social pressures, seek to improve their investments in CSR; and, in doing so, they design a managerial compensation scheme that incentivizes the manager to meet the firm’s goals related to CSR investments. Hence, since CSR is associated with an increase in the long-term firm’s value, the equity-based component of the managerial scheme is higher than in the remaining firms. However, the high proportion of cash-based compensation is far from the desirable goals promoted by the Governance Codes.

Common institutional ownership and corporate social responsibility

We examine relationship between common institutional ownership and corporate social responsibility (CSR). We find that common institutional ownership is negatively associated with the level of CSR, which supports an anti-competitive view. We conduct a propensity score matching (PSM) analysis and a difference-in-differences (DiD) analysis based on a quasi-natural experiment of financial institution mergers. The results alleviate concerns about endogeneity. Using the DiD setting, we find further support for the anti-competitive view, and can rule out alternative explanations. Additional analyses on investor characteristics show that our results come mainly from common owners with long-term investment horizons or lower social inclination. Moreover, we find that the anti-competitive effect is more pronounced for mature firms, and for firms in industries with lower labor intensity and lower customer sensitivity.

Are Socially Responsible Firms Associated with Socially Responsible Citizens? A Study of Social Distancing During the Covid-19 Pandemic.

The literature on the interplay between geographic communities and organizations has largely ignored the role of individual residents. In adopting a meso-perspective, we examine a potentially vital relationship between corporate conduct and pro-social behavior demanding sacrifice from individuals. Drawing on Weber (Economy and society: an outline of interpretive sociology. University of California Press, Berkeley, 1978 (Translation of Wirtschaft und Gesellschaft, Grundriss der verstehenden Soziologie, 1922)), we theorize that organizations in a community legitimize personal social conduct in three ways—by serving as role models, imparting norms and values, and routinizing forms of interaction. We study the relationship between corporate social responsibility (CSR) behavior by local firms and the social distancing (SD) of citizens in US counties during the Covid-19 pandemic, a core ethical outcome. We argue and find that the residents of communities in which firms exhibit higher levels of CSR engaged in more SD during the Covid-19 pandemic. This was true when firms were (a) long-established, (b) isomorphic in their CSR, and (c) major employers and vendors. Moreover, CSR relating to the treatment of employees as well as positive and negative extremes in CSR bore especially strong relationships with SD. Implications are drawn for the study of business ethics, as modeled by CSR, as a force for ethical personal behavior and public health in communities.