Theoretical evidence suggests that corporate social irresponsibility (CSI) should produce long-lasting negative influences on firm performance. Yet, little empirical evidence exists in the literature to support this time-embedded research frame. This research was conducted by collecting a large set of firm data and by employing a series of vector autoregressive models to map out the longitudinal dynamic relationships between CSI and firm value under high versus low levels of two external factors, environmental dynamism and competition intensity, and one internal factor, (...) firm capability. The results show that CSI’s negative influences endure in scenarios such as high dynamism, high competition intensity, and low capability, but it has only a short-term impact on low-dynamism markets and does not produce significant effects on firm value under low-competition or high-capability conditions. These findings yield useful implications for CSI, resource-based theory, and environment theories as well as for managerial effectiveness of coping with social negativities. (shrink)

In the literature, CSR’s roles on firm performance are found to be positive, negative, or neutral. This inconclusive pattern suggests there may be a more complicated mechanism at work than the traditional focus on simple linear associations. We propose and test an inverted-U-shaped relationship between CSR and shareholder value, the fundamental measure of firm performance. Further, we incorporate a critical firm attribute, marketing capability, to moderate the nonlinear link between CSR and shareholder value, thereby exploring a previous understudied area involving (...) the interplay between CSR and market-side competency. The results show that an initial increase in CSR engagement positively drives firm shareholder value, but the effect turns negative when a firm pursues excessive CSR engagement. Notably, however, this negative association does not apply to firms that have a high marketing capability. Our research generates meaningful implications for a stakeholder view of CSR, strategic management, firm valuation, resource-based theories, and business practices. (shrink)

The traditional understanding of corporate social responsibility (CSR) has largely been focused on its downstream performance implications, particularly its associations with firms’ customer market metrics such as customer loyalty, customer satisfaction and customer co-creation as well as financial ones such as firm value, return on assets etc. However, given the close relationship between CSR and marketing that literature has identified, it is surprising that the relationship between a focal upstream construct, i.e. the marketing function’s power within a firm and the (...) firm’s propensity toward CSR has not been addressed in the literature. Examining the link between marketing’s power (MP) in a firm’s top management team (TMT) and firm CSR levels, we investigate how this fundamental TMT configuration, i.e. the distribution of marketing power in the TMT, motivates the firm’s social endeavors. Further, we formulate this relationship in a contingency-based model that incorporates the moderating effects of firm size, firm age, service intensity, and resource slack across 1569 firms operating in 63 industries. In addition to their effect on CSR, this study shows how MP in TMT may influence corporate social irresponsibility (CSI) as well as CSR capability after controlling for industry type. The inclusion on these additional dimensions of CSR (CSI and CSR capability) complements our analyses of the effect that MP has on CSR. The research contributes to a deeper understanding of CSR’s fundamental corporate determinants as well as identifies the essential role of the marketing function in firms’ CSR strategy. In this process, it yields useful implications for multiple streams of theory as well as for business practices. (shrink)