Can mandated adoption of corporate social responsibility (CSR) improve firm value? Most CSR adoption is purely voluntary. However, governments regularly encourage CSR adoption with soft regulations that vary from simply endorsing and symbolically supporting CSR to requiring the adoption of specific practices. Governments have resisted fully mandating CSR because there is some concern universally that mandated CSR may reduce firm value. There is, however, no empirical clarity as to whether mandated CSR impedes or improves firm value. We address this uncertainty (...) by analyzing the effects of the mandated adoption of CSR that the government of India legislated in 2014. Drawing on a sample of 1,526 publicly traded firms and deploying a combinative analytical framework comprising an event study, regression discontinuity design, and a difference-in-differences technique, we conclude that India’s CSR mandate did, in fact, increase value for all firms bound by the mandate. This value-enhancing effect was greater for foreign firms relative to domestic firms. Our results refute previous research showing that India’s CSR mandate diminished firm value. (shrink)

Scholars agree that the environmental and societal impacts of consumption require greater attention, and need examining in more diverse market contexts. This editorial essay focuses on the nascent area of ethical/sustainable luxury, and critically considers how the scope of ethical/sustainable consumption can be broadened in the luxury sector. We address the compatibility of ethicality/sustainability and luxury by examining a range of opportunities and inherent tensions in relation to improving the ethical/sustainable consumption practices within the luxury sector. We also introduce several (...) original articles published as part of this Thematic Symposium, whose arguments underscore both the merits, and flaws, of ethical/sustainable luxury. On the basis of this and prior research, we present a balanced perspective by identifying various factors that facilitate or inhibit the acceptance and furtherance of ethicality/sustainability within sector. Thus, this essay serves as a springboard for further research and development in ethical/sustainable luxury whilst simultaneously highlighting the importance of the topic in general. (shrink)

The world is not on track to achieve Agenda 2030—the approach chosen in 2015 by all UN member states to engage multiple stakeholders for the common goal of sustainable development. The creation of the 17 Sustainable Development Goals (SDGs) arguably offered a new take on sustainable development by adopting hybrid and principle-based governance approaches, where public, private, not for profit and knowledge-institutions were invited to engage around achieving common medium-term targets. Cross-sector partnerships and multi-stakeholder engagement for sustainability have consequently taken (...) shape. But the call for collaboration has also come with fundamental challenges to meaningful engagement strategies—when private enterprises try to establish elaborate multi-stakeholder configurations. How can the purpose of businesses be mitigated through multi-stakeholder principle-based partnerships to effectively serve the purpose of a common sustainability agenda? In selecting nine scholarly contributions, this special issue aims at advancing this discourse. To stimulate further progress in business studies, this introductory essay, furthermore, identifies three pathways for research on multi-stakeholder engagement processes in support of the Decade of Action along three coupling lines: multi-sector alignment (relational coupling), operational perception alignment (cognitive coupling) and goal and strategic alignment (material coupling). (shrink)

This article examines how corporate social responsibility (CSR) can serve as an external source of rents for governments that depend on foreign financing for state-building and development. The strategic, instrumental use of CSR has been overlooked in previous research on governments and CSR, especially in the Global South. To understand how CSR can serve as a lever for rents, the concept of “extraversion” is introduced to describe the way in which rent-seeking African governments instrumentalize their asymmetric external relations for political (...) and private benefit. The connection between CSR and rent-seeking is analyzed through a case study of large gas investments in Tanzania. The article finds that the government has set up regulation that enables local and central government authorities to appropriate, mediate, reclaim, or possibly trick CSR practices to gain rents. Based on the study, two contributions are made to the literature on CSR and governments. First, the instrumental use of CSR in the Global South is added to the variety of perspectives that can be taken when studying government agency. Second, CSR is conceptualized as a potential stream of rents for governments to exploit. The article ends with discussing that the outcome of CSR in a rent-seeking environment depends on whether the leveraged resources are managed well to support peaceful and locally beneficial economic development or whether they serve private accumulation through corruption. (shrink)

Whereas extant literature has examined the overall effect of corporate social responsibility (CSR) on innovation, it is argued that CSR is a multidimensional concept encompassing both progressive activities concerning a firm’s engagement in the social domain, as well as rational aspects pertaining to corporate governance practices and the protection of shareholder rights. This study integrates organizational hypocrisy with the knowledge-based view literatures to examine how different forms of CSR engagement affect the rate of new product introductions (NPI). Results suggest that (...) the mechanisms by which progressive and rational CSR are associated to increases in the rate of NPI differ. Specifically, while progressive CSR positively affects the rate of NPI and such effect is deemed stronger for firms that are more vertically integrated, the effect of rational CSR on the rate of NPI is conditional on a firm’s level of absorptive capacity. (shrink)

From the financial year 2014-15, the Indian corporate sector was made to comply with a newly introduced Sect. 135 (5) by the Companies Act of 2013. The rule required select companies to spend 2% of their average net profits on CSR initiatives. This paper tries to find if the companies have complied with the provision based on data for six financial years starting 2014-15. CSR performance of the top thirty companies forming part of the Bombay Stock Exchange (BSE) Sensex was (...) evaluated and a CSR Spend-to-Obligation (CSR SO) Index was calculated comparing the actual spend vis-à-vis the obligatory requirement. A quantitative and a qualitative methodology were used for the analysis. The quantitative method involved computation of the CSR SO index at various levels. The “quality” of the CSR expenditure was also assessed by speaking to twelve experts from the Corporate to find out if the expenditure was in the right direction. The results show that the aggregate average six-year CSR SO index for the 30 Sensex companies is 0.98, suggesting that companies comply with the requirements of mandatory CSR. Moreover, the experts confirm that CSR spending is in the right spirit and direction. It certainly has a long-term orientation and qualifies as quality spending. A novel CSR-SO index is presented that compares CSR performance by comparing actual CSR spending with obligatory requirements. This index can act as a barometer for CSR performance and facilitate objective evaluation. Additionally, the qualitative assessment of CSR spending shows a holistic approach to evaluating CSR. (shrink)

Business Ethics: A European Review, EarlyView.

The purpose of the study is to investigate whether internal and external institutional environmental conditions play a role in the institutionalization of strategic commitment to corporate social responsibility (CSR) among Indian firms in the wake of the mandatory CSR norms or not (where the firms of certain size and profitability are mandated to spend on CSR). The study examines the fixed effects regression on balanced panel data collected from the annual reports and Prowess database of Bombay Stock Exchange-listed firms. Our (...) results show that both internal and external institutional environments play a major role in diffusing a strategic commitment to CSR among firms. Furthermore, we find that firms indulge in frequency, outcome, and trait-based imitations while learning from peer firms to attain legitimacy from their stakeholders. Overall, our findings show that vicarious learning through imitation plays an important role in making firms truly committed to CSR instead of just donating money or greenwashing. To the best of our knowledge, our study is among the pioneering attempts to look at the impact of both internal and external environments on institutionalizing CSR commitment among firms in India. (shrink)

This paper analyzes the relationship between Business Groups as a distinct way of organizing economic activities and their relation to the public good. We first analyze the phenomenon of Business Groups and discuss some of their core features. Subsequently, the paper moves to analyzing the existing literature on Business Groups and corporate social responsibility as the most common label for the topic of this Special Issue. Subsequently, specific peculiarities of Business Groups in the context of CSR and their contribution to (...) the public good are fleshed out. Based on this analysis, the paper delineates some implications for the field of CSR and the wider debate on the nature of the firm. We close with some perspectives for future research. (shrink)