Social Firm Performance Research Articles

Coopetition for corporate responsibility and sustainability: does it influence firm performance?

PurposeCorporate responsibility and sustainability (CRS) have emerged as an important topic today. At the same time, alliances and coopetition arrangements, as vehicles for inter-firm collaboration have been shown to support firm performance. Still, there has been a lack of research into how coopetition (collaboration with competing firms) in this area may support firm performance.Design/methodology/approachThis study aims to untangle the relationship between coopetition arrangements including CRS and firm performance. The model permits garnering social performance, which is a key to CRS, and to move beyond the traditional view of the coopetition–firm–economic–performance relationship. This study is based on a survey and primary data from 215 firms in Australia. This study uses multiple indicators for the concepts. Relationships are estimated by multiple regression analyses.FindingsUsing survey data from 215 firms in Australia, the research findings confirm that coopetition in CRS can lead to improved firm performance, both in relation to financial and social performances. However, the association between coopetition in CRS and financial performance loses its significance when social performances is introduced as an additional control variable. Further, stakeholder attributes (i.e., effective power and legitimate stake) moderate the relationship between coopetition in CRS and firm financial performance. However, there was no evidence of moderation for the coopetition in CRS – firm social performance relationship.Research limitations/implicationsThis study contributes to both coopetition and corporate social responsibility research. This study demonstrates that improved firm performance may be achieved through the promotion of CRS initiatives when a coopetitive approach is adopted, particularly where an understanding of stakeholder attributes is also evident. Firms do not need to shoulder corporate social responsibility alone. They need to find well-fitting partners. There are new ways to improve sustainability in terms of nature and human relationships.Practical implicationsFirms do not need to shoulder Corporate Social Responsibility (CSR) alone. They need to find well-fitting partners.Originality/valueThis study provides very novel insights by having integrated the literature on coopetition, corporate social responsibility and sustainability resulting in a new conceptual framework that combines coopetition in CRS and performance. The new conceptual framework has both practical and research implications for coopetition in CRS and firm performance.

Female leadership and ESG performance of firms: Nordic evidence

Purpose This paper aims to focus on the relationship between female leadership and the environmental, social and governance (ESG) performance of firms. Specifically, the study examines if firms with women as chief executive officers (CEOs) and/or board chairpersons have higher environmental and social scores. Design/methodology/approach The study uses data on publicly listed Nordic firms in a panel regression approach to establish the relationship between female leadership and the environmental and social performance of firms. Findings The result of this study shows that women have a leadership characteristic that increases the weighted average of environmental (E) and social (S) performance of a firm. In particular, pillar score results indicate a positive relationship between female CEOs and the social scores of a firm but no relationship between a female board chairperson and the environmental or social scores of a firm. This implies that gender-based differences affect the CEO’s success, especially in a firm’s social performance. Further analyses show a more significant impact on the E and S performance when a woman replaces a man as CEO of a firm. Originality/value While prior research has explored various aspects of gender diversity in corporate leadership and its potential impact, the focus on the Nordic context in this study provides a unique perspective, given the region’s distinct business environment and societal factors. In addition, by examining the collective influence of female leaders and both female CEOs and board chairpersons separately, this study provides a nuanced understanding of how different leadership roles may impact a firm’s ESG performance.

Same-sex Marriage Ban and Firm Social Performance

Same-sex Marriage Ban and Firm Social Performance

A Sizable Advantage: Environmental and Social Sustainability Implications of Gender Diversity

We study the effect of board gender diversity on environmental and social performance of firms. Our model complements existing literature in the field of corporate governance and sustainability by hypothesizing a direct positive effect of board gender diversity on environmental and social performance. We further argue that this direct effect is moderated by firm size such that the effect of board gender diversity on environmental and social performance is larger for smaller firms. We find evidence for our hypotheses when using board gender quotas as the empirical setting for our identification strategy. Our results of a staggered difference-in-differences approach with 2,981 firm-year observations of 511 firms in eight European countries with mandatory board gender quotas provide tentative evidence of a direct effect of board gender diversity on environmental and social performance. Yet, the moderation effect is positive and highly significant, which suggest that particularly smaller firms are able to improve environmental and social performance though board gender diversity.

Sustainable social supply chain practices and firm social performance: Framework and empirical evidence

Concerns about social sustainability issues such as child labour, inequality, excessive overtime, and abusive working and living conditions in developing countries' manufacturing sectors have prompted an urgent study on sustainable social supply chain practices. The social pillar of sustainability has then been unnoticed, favouring the more regularly discussed environmental and economic dimensions. This study aims to expand the social sustainability framework to investigate the impact of sustainable social supply chain practices on firm social performance. The electronic survey was conducted on firms that adopted sustainable social practices. The 144 data sets were received from manufacturing firms. The data were analysed using structural equation modelling with PLS-SEM to examine domains and outcomes of sustainable supply chain practices. The result found that social supply chain practices impact the firm's social performance. However, the results indicate that the social element of sustainable procurement does not affect the firm social performance. The results show social fairness challenged manufacturing firms to comply with sustainable production and distribution. Most manufacturing firms are still not aware of their role and social responsibility to develop the local suppliers and community. Sustainability framework has proposed to raise awareness of sustainable practices that drive firms to implement sustainable social supply chain practices and leverage social performance. By being socially responsible, firms can gain improved brand awareness, a favourable corporate reputation, increased sales, observed firm growth and enhanced customer loyalty.

Boosting environmental management: The mediating role of Industry 4.0 between environmental assets and economic and social firm performance

AbstractThe adoption of new innovative ecosystems linked to Industry 4.0 (I4.0) in industrial firms has created new opportunities for performance. In this study, we investigate whether I4.0 can reinforce environmental asset management in achieving firm economic and social performance. We intend to contrast the existence of I4.0‐based reward mechanisms for being green. Using a panel of 1028 Spanish industrial firms in 2009–2016 period and a partial least squares structural equation modelling econometric methodology, the research has obtained two main results. First, the management of environmental assets generates positive effects on the economic and social performance of the industrial firm. Second, research findings confirm the mediating role of I4.0, which ends up reinforcing the relationship between environmental assets and the economic and social firm performance. The results obtained highlight the importance of complementary relationships between digital and environmental transformation to promote firm performance. Implications for firm strategy and business models are also discussed.

Institutional cross‐ownership and firm social performance

AbstractResearch Question/IssueThis paper examines the relation between institutional cross‐ownership from the same industry (hereafter, INSTCO) and corporate social responsibility (hereafter, CSR) for Chinese publicly traded firms. We also investigate whether the relation between INSTCO and CSR depends on the strength of the internal and external corporate governance.Research Findings/InsightsBased on a sample of Chinese listed firms from 2009 to 2017, we find that INSTCO is significantly positively associated with firm CSR performance. We interpret our results under the signaling theory of strategic CSR spending, according to which CSR spending is a valuable signal that distinguishes firms from peers, particularly in an environment with severe information asymmetry. The effective monitoring of INSTCO drives managers to engage in the CSR signaling more actively. Furthermore, this positive association between INSTCO and CSR signaling is only found among firms with strong internal and/or external corporate governance.Theoretical/Academic ImplicationsThe findings in this paper indicate that the well‐documented monitoring role of INSTCO also has important implications on firms' social performance. Moreover, our findings contribute to the literature on strategic CSR spending by highlighting the role of CSR spending as a signaling device in China as the largest emerging market. Lastly, both internal and external corporate governance significantly moderate the impact of INSTCO on firms' social performance.Practitioner/Policy ImplicationsCSR initiatives are valuable signals. Policy makers should be aware that common ownership may enhance stakeholders' welfare due to INSTCO's monitoring effect, since this study documents a significantly positive effect of INSTCO on corporate social performance. Investors in the Chinese market should also be aware of the nontrivial signaling function of CSR activities, especially in a strong internal governance and/or an investor‐friendly external governance environment.

Corporate governance model, stakeholder engagement and social issues evidence from European oil and gas industry

PurposeLately, sustainability issues are increasingly affecting all sectors, even if oil and gas industry is highly required to improve its social performance because of the societal pressure to environmental protection and social welfare. Sustainability concerns and corporate governance features and practices are more and more connected because sustainability has been perceived as a crucial topic by owners and managers. In this perspective, the empirical analysis aims to explore whether and to what extent, sustainability-oriented corporate governance model is linked with social performance.Design/methodology/approachBy adopting a multi-theoretical framework that includes the legitimacy theory, the stakeholder theory and the resource-based view theory, this analysis used a sample of 42 large European-listed companies belonging to the oil and gas industry. The authors run fixed effects regression models by using a dependent variable, i.e. the social score, available in ASSET4 Thomson Reuters, and some independent variables focused on sustainable corporate governance models, stakeholder engagement, firm profitability, market value and corporate risk level.FindingsDrawing upon the investigation of a moderating effect, findings display that stakeholder engagement is positively associated with corporate social performance and it can be considered an important internal driver able to shape a corporate culture and most likely to address corporate social responsibility issues.Research limitations/implicationsThis study confirms the need to develop an organizational and holistic approach to corporate governance practices by analyzing internal and external governance mechanisms. From the managerial perspective, managers should opt for a sustainable corporate governance model, as it is positively correlated with corporate social performance.Originality/valueThere is an urgent need to investigate sustainability issues and their potential association with firm internal mechanisms, particularly in the oil and gas industry. This paper can extend the current body of knowledge by pointing out a positive relationship between stakeholder engagement and firm social performance.

Dazed and Confused: Reconsidering the Relationship Between Drug Testing and Firm Performance

As the United States nears its 50th anniversary in the War on Drugs, societal attitudes toward substance use have changed drastically, especially with respect to the substance most commonly tested for in the workplace: marijuana. Despite the changing tide of attitudes toward substance use, about half of medium and large corporations still test employees for drugs as part of employment screening, ongoing employee management, or both. Moreover, despite the prevalence of workplace drug testing, little research has investigated how drug testing relates to firm performance. In this work, we draw from the behavioral theory of the firm and to predict that drug testing is a perceived violation of employee’s rights and privacy, and that these violations affect employee attitudes and, subsequently, employee performance. Moreover, we argue that drug testing represents a disregard on the part of management for the rights and privacy of employees, which in turn informs how employees interact with other stakeholder groups, negatively affecting firm social performance. Findings reveal that organizations utilizing drug testing regimes do indeed experience decreases in financial performance and tend to have more extreme outcomes on social performance dimensions, with both positive and negative dimensions of social performance increasing or decreasing simultaneously.

Too Good to Be True: Firm Social Performance and the Risk of Data Breach

Data breaches are now a daily occurrence. What corporate leaders may not realize is that certain actions they are taking in the social responsibility space may, in fact, be placing a proverbial target on their backs. Indeed, there is evidence that the hacking community is not homogeneous, and at least some hackers from both internal and external sources appear to be motivated by what they dislike as opposed to solely financial gain. Recent hacks against the World Health Organization, as a result of its actions (or supposed inactions) related to the COVID-19 pandemic, are a case in point. In this paper, we put forth the idea that espoused positive social performance in areas that are peripheral to core business operations (e.g., philanthropy, recycling programs) can be a detriment to information security, particularly when firms have simultaneous high levels of social concerns (e.g., poor employee relations, product safety concerns, involvement in an environmental controversy). Our results support this outcome. It appears that some perpetrators can “sniff out” firm social actions that attempt to give the appearance of social responsibility and possibly mask poor social performance, and consequently, these firms are victimized by a malicious data breach more often.

The impact of board independence and foreign ownership on financial and social performance of firms: evidence from the UAE

PurposeThis study examines the impact of two different types of foreign ownership—by Arab and non-Arab investors on firms' financial and social performance. It then goes on to investigate how the degree of board independence affects the aforementioned relationship between these two types of foreign investors on firm performance.Design/methodology/approachThe sample for the study is a panel of all listed firms in the Dubai Financial Market (DFM) and the Abu Dhabi Securities exchange (ADX) from 2008 to 2012.FindingsResults indicate that while Arab foreign ownership affects firms' financial and social performance negatively, non-Arab foreign ownership does so, positively. Further tests indicate that board independence weakens the negative relationship between firm financial and social performance with foreign Arab ownership and deteriorate the relationship between firm financial and social performance and non-Arab foreign ownership.Research limitations/implicationsFuture studies may extend the coverage of the study by including other countries in the region and other identities of the foreign investors.Practical implicationsThis study may help policy makers in the UAE to improve the implementation and enforcement of existing regulations concerning corporate social responsibility (CSR) and board independence. It also highlights the need to look into the monitoring role of independent board members.Originality/valueThis is the first study to examine the role of board independence on the relationship between foreign ownership and firm's financial and social performance. To the best of our knowledge, this is the first paper that attempts to enrich the understanding of foreign ownership by classifying it into Arab versus non-Arab.

INTERORGANISATIONAL COLLABORATION FOR INNOVATION IMPROVEMENT IN MANUFACTURING FIRMS’S: THE MEDIATING ROLE OF SOCIAL PERFORMANCE

The impact of collaboration on innovation performance has been investigated in many studies. This study provides a unique view on innovation performance by exploring the mediating role of social performance between collaboration and innovation performance. For this, a structural model was tested through an empirical investigation with partial least squares structural equation modelling (PLS-SEM) using a sample made up of 239 export manufacturing firms. The results of the empirical study show that social performance appears to be a necessary condition for innovation performance. Our findings confirm the great potential of addressing social concern increasingly drive innovation performance. The next decade is likely to be a period of rapidly expanding social performance practices in the manufacturing firms. The managers could foster sustainable innovation by collaborating customers and enhance their firm social performance.

How Activist Investors Influence Corporate Social Responsibility

We investigate how hedge fund activism affects target firms’ financial and social performance. We create a matched sample from hand-collected data on all available hedge fund activist campaigns between 2000 and 2012. Using difference-in-differences, we find targeting by an activist hedge fund is associated with an immediate but short-lived increase in firm value, and an immediate and long-lived decline in cash flow. We also find targeting suppresses firm social performance three- to five-years after an activist campaign. In additional analyses, we find reductions in other operational areas of targeted firms, including: number of employees, R&D spending, capital expenditures, and operating expenses. We discuss our findings from a multi-stakeholder perspective in an effort to move beyond a polarizing debate about the merits of hedge fund activism.

Green Marketing Orientation and Environmental and Social Performance of Hospitality Firms in South Africa

Abstract The pressure on businesses to engage not only on profitability but also on social and environmental responsibility has increased in recent times. The study empirically tested the relationship between green marketing orientation (GMO) and environmental and social performance in the context of firms in the hospitality industry. Sustainable performance measurement focuses not only on financial but also on social and environmental performance. The study used the quantitative research design, and the cross-sectional survey method was used for data collection from 192 respondents. Descriptive statistics, Pearson correlation, and regression analysis were used for data analysis. Cronbach’s alpha was used as a measure of reliability. The results indicated a significant positive relationship between GMO and environmental and social performance of hospitality firms. The findings of the study suggest that GMO is a firm-level strategic resource that can improve the sustainable performance of firms in the hospitality sector. Theoretically, the study linked GMO to environmental and social performance of firms. Empirically, the study adds to the literature on the effect of GMO on sustainable performance. Practically, the study suggested recommendations that can improve the adoption of GMO by firms. These include green design, green positioning, green supply chain, and green strategy.

The impact of relational governance on performance improvement in export manufacturing firms

Purpose: This paper seeks to identify the factors affecting social performance improvemens in the Pakistan export manufacturing firms and investigae inter-relationships existing among them.Design/methodology/approach: This study used a cross-sectional survey; data were collected using self-administered survey questionnaire. Using data collected from 239 small- and medium-sized direct exporters manufacturing firms in Pakistan. We used structural equation modelling (SEM) approach to test structural model, and mediation analysis was conducted with regression analysis.Findings: The results support that meta-cognitive dimensions of cultural intelligence effect on social performance improvements, while the social performance improvement significant associated with innovation performance improvements. We suggest that cultural intelligence is a key to maintaining a relationship through development better cultural understanding and creating harmony among suppliers and buyers through minimizing the differences and disputes, requires developing social cohesion. Our results reveal that exporting firms need to adapt, reconfigure cultural knowledge and integrate resources into the operations to build learning capability, in turn, they can improve social performance and achieve superior innovation performance.Practical implications: Through the application of cultural intelligence capabilty, a firm could increase its ability to sense cultural differences, seize and adapt globally scattered cultural practices on social issues and allows for the development of unique knowledge resources and capabilities, impact on firm social performance and innovation performance improvements.Originality/value: The study conducted in Pakistan cultural context, which can be extended to other Asian countries. We argue that in a globalising world it is pertinent for exporting firms to have a better understanding of the various facets of cultural when dealing with inter-organisational relationships.

The impact of corporate social responsibility on social performance, financial performance and customer reactions in the food industry

Corporate social responsibility (CSR) is among the most important factors affecting financial and social performance in companies and plays a key role in consumer reactions. This paper aims to model the impact of CSR on financial and social performance of firms as well as consumer reactions. The required data are gathered using random sampling and a questionnaire developed by the authors, enjoying 97% reliability. The statistical population includes the managers and top customers of a select group of food companies in the City of Khuzestan (Iran). Five hundred forty individuals are selected as the sample. Both descriptive and inferential statistical analyses, e.g., structural equations are carried out using SPSS and AMOS software packages. The results indicate that all hypotheses are supported with 95% confidence. Therefore, CSR affects financial performance both directly and by mediation through social responsibility and consumer reactions.

The impact of corporate social responsibility on social performance, financial performance and customer reactions in the food industry

Corporate social responsibility (CSR) is among the most important factors affecting financial and social performance in companies and plays a key role in consumer reactions. This paper aims to model the impact of CSR on financial and social performance of firms as well as consumer reactions. The required data are gathered using random sampling and a questionnaire developed by the authors, enjoying 97% reliability. The statistical population includes the managers and top customers of a select group of food companies in the City of Khuzestan (Iran). Five hundred forty individuals are selected as the sample. Both descriptive and inferential statistical analyses, e.g., structural equations are carried out using SPSS and AMOS software packages. The results indicate that all hypotheses are supported with 95% confidence. Therefore, CSR affects financial performance both directly and by mediation through social responsibility and consumer reactions.

Investigating the mediating role of cultural intelligence on the relationship between relational governance and firm social performance

Investigating the mediating role of cultural intelligence on the relationship between relational governance and firm social performance

Do Institutional Investors Influence Firm Social Performance?

This study examines whether passive institutional investors influence Corporate Social Responsibility (CSR). The literature shows conflicting evidence about the effect of institutional investors on CSR, which might indicate problems associated with endogeneity. We analyze the causal effect of passive institutional investors on CSR by exploiting a source of exogenous variation in passive institutional ownership due to the inclusion in the Russell 2000. Our findings indicate that a 1% increase in passive institutional ownership reduces in 7.6% the probability of improving CSR. This effect is economically stronger for those firms that have a higher level of CSR compared to industry peers. The results are robust to the inclusion of additional determinants of CSR such as profitability or firm size.

Sustainable collaboration: The impact of governance and institutions on sustainable performance

Collaboration between firms is important to stimulate the transition to a more sustainable society. This special volume shows that collaboration is indeed one of the preferred forms of governance to manage relations between firms in a sustainability context. Collaboration enhances sustainable benefits by creating legitimacy of sustainable technologies, reducing waste and improving environmental and social performance of firms. The institutional environment, in particular environmental laws and regulations, has a beneficial impact on collaboration and relationship management in sustainable supply chains. Two studies in this special volume show, however, that stringent environmental regulations may hinder economic performance and result in outsourcing to foreign suppliers with potential detrimental effects for environmental performance. These negative effects can be overcome by firms that invest in sustainable innovation. This special volume also shows that eco-innovation leads to sustainable benefits, such as lower greenhouse gas emissions.