This policy-capturing study, conducted in China, investigated the cognitive basis of managerial decisions to make a corporate charitable donation, a global issue in the context of corporate social responsibility research and practice. Participants responded to a series of scenarios manipulating pressure from the five stakeholders most commonly addressed by CSR research. The independent variables examined included organizational factors and the participants’ personal values. Results indicate a large positive effect of shareholder and governmental pressure on the decision with lesser positive effects (...) from customers and competitors. Surprisingly, employee pressure had a negative effect on the decision to make a charitable donation. Further, personal values and perceived CEO attitudes toward charity were significantly related to the decisions participants made. In line with our theorizing, the findings indicate that a combination of personal, organizational, and institutional factors was salient in the minds of decision makers. (shrink)

One of the older questions in the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for organizations to pay attention to societal demands. This debate was emotionally, normatively, and ideologically loaded. Up to the present, this question has been an important trigger for empirical research in CSR. However, the answer to the question has apparently not been found yet, at least that is what many researchers state. This apparent ambivalence in CSR consequences invites a literature study that (...) can clarify the debate and allow for the drawing of conclusions. The results of the literature study performed here reveal that there is indeed clear empirical evidence for a positive correlation between corporate social and financial performance. Voices that state the opposite refer to out-dated material. Since the beginnings of the CSR debate, societies have changed. We can therefore clearly state that, for the present Western society, “Good Ethics is Good Business.”. (shrink)

The objective of this paper is to empirically examine the impact of national culture on firm’s corporate social responsibility (CSR) across geographical regions. Empirical tests are based on CSR performance of 3055 corporations from 28 countries located in Eastern Asia and Europe. The findings suggest that the Hofstede’s cultural dimensions have significant impacts on CSR performance, both positively and negatively depending on a given dimension of CSR. In addition, corporations located in European countries tend to effectively outperform those in Eastern (...) Asian countries in every facet of socially responsible practice. (shrink)

Perceptions of a firm’s stance on corporate social responsibility (CSR) are influenced by its corporate marketing efforts including branding, reputation building, and communications. The current research examines CSR from the consumer’s perspective, focusing on antecedents and consequences of perceived CSR. The findings strongly support the fact that particular cues, namely perceived financial performance and perceived quality of ethics statements, influence perceived CSR which in turn impacts perceptions of corporate reputation, consumer trust, and loyalty. Both consumer trust and loyalty were also (...) found to reduce the perceived risk that consumers experience in buying and using products. From these significant findings, we draw several conclusions and implications, including the importance of enhancing firm focus toward its ethical commitment and long-term reputation. (shrink)

Since the 1970s, many Anglo-American studies have investigated the theme of corporate social responsibility (CSR) and its costs and benefits. Most studies have tried to test, largely in samples of multiple industries, the relationship between corporate social performance (CSP) and corporate financial performance (CFP). These analyses, however, have produced conflicting results and any attempt to give a generalized and coherent conclusion has proved inadequate. This article examines the ways CSP can be proxied and investigates the possible relationship between CSP (measured (...) by ethical rating) and CFP (measured by market and accounting ratios) in the banking sector using correlation methodology. It emerges that there is no statistically significant link between CSP and CFP. (shrink)

In this article, we examine the effect of corporate social responsibility (CSR) on firms' financial performance (CSR-effect). Two competing hypotheses, social impact hypothesis and shift of focus hypothesis, are proposed to investigate this issue, where the former suggests that CSR has a positive relation with performance and the latter are opposite. In order to ensure the CSR-effect is not contaminated by other faeton or samples are randomly drawn, we employ four matching methods, Nearest, Caliper, Mahala and Mahala Caliper to match (...) the samples of CSR (CSR-firms) and without CSR (NonCSR-firms) with similar characteristics. Although four methods yield slightly different results, firms engaging in CSR activities tend to obtain significantly higher values on pretax income to net sales and profit margin, and adopting CSR at the very least not deteriorate the performance of firms, making our con clusion favors the social impact hypothesis and against shift of focus hypothesis in Taiwan. Thus, ambition and conscience are not conflicting with each other. (shrink)

The academic debate why and how companies are dealing with sustainability is dominated by two main arguments—the profit-seeking and the legitimacy-seeking view. While the first argues that companies establish sustainability management measures if this helps to increase their economic success, others emphasize that companies predominantly react on societal pressure dealing with sustainability to secure legitimacy. Whereas both lines of argument have gained a lot of attention in academia, little is known about their relative importance in shaping corporate practice. This papers (...) aims to fill this gap with an empirical analysis of corporate practices of large companies in ten countries worldwide. To capture the organizations’ rationale in sustainability management practice, we systematically applied various measures related to actors and operational activities focusing on the companies’ intention to pursue sustainability management, the integration of sustainability management to the core business, and the actual implementation of related measures. Overall the findings indicate that seeking legitimacy dominates corporate sustainability management practices. (shrink)

Most research studying the corporate social performance –corporate financial performance link has utilized developed country samples. Also, this literature has generally focused on a wide variety of industries, ignoring the fact that certain sectors – such as controversial industries – have graver social and environmental issues. Hence, a gap exists in this tradition when it comes to emerging markets and controversial industries. This paper attempts to fill this void by providing preliminary evidence and insight on the matter. Based on an (...) exploration in six Latin American countries and five controversial industries, we find a negative bidirectional association between CSP and CFP. These results tend to contradict the mainstream conclusion of a positive bidirectional link, suggesting that institutional and market-level forces play a major role in shaping this relationship. (shrink)

Although a number of studies have shown that corporate social responsibility (CSR) activities often lead to greater organisational performance in western developed economies, researchers are yet to examine the strategic value of CSR in emerging economies. Using survey data from 280 firms operating in Dubai, this study examines the link between CSR activities and organisational performance. The results show that CSR has a positive relationship with all three measures of organisational performance: financial performance, employee commitment, and corporate reputation. These results (...) reinforce the accumulating body of empirical support for the positive impact of CSR on performance and challenge the dominant assumption that, given the weak institutional framework in emerging economies, CSR activities drain resources and compromise firms’ competitiveness. (shrink)

This paper aims to critically review the existing literature on the relationship between corporate governance, in particular board diversity, and both corporate social responsibility and corporate social responsibility reporting and to suggest some important avenues for future research in this field. Assuming that both CSR and CSRR are outcomes of boards’ decisions, this paper proposes that examining boards’ decision making processes with regard to CSR would provide more insight into the link between board diversity and CSR. Particularly, the paper stresses (...) the importance of studies linking gender diversity and CSR decision making processes, which is quite rare in the existing literature. It also highlights the importance of more qualitative methods and longitudinal studies for the development of understanding of the diversity–CSR relationship. (shrink)

One of the major roadblocks in conducting Environmental Corporate Social Responsibility (ECSR) research is operationalization of the construct. Existing ECSR measurement tools either require primary data gathering or special subscriptions to proprietary databases that have limited replicability. We address this deficiency by developing a transparent ECSR measure, with an explicit coding scheme, that strictly relies on publicly available data. Our ECSR measure tests favorably for internal consistency and inter-rater reliability, as well as convergent and discriminant validity.

This paper examines the influence of CEO career horizon problems on corporate social responsibility. We assume that as CEOs are getting older, they tend to disengage in CSR due to their shorter career horizons. We further argue that high levels of industry-level discretion and blockholder ownership amplify the negative effects of CEO age on CSR. Using a panel sample of US-based firms over 2004–2009, we do not find the main effect of CEO age on CSR, but find support for the (...) moderating effects, such that CEO age is negatively associated with CSR when there are high levels of ILD and blockholder ownership. Therefore, results suggest that CEO career horizon problems matter for CSR when CEOs have sufficient discretion over the firm’s strategic decisions and outside blockholders put more pressure on CEOs to engage in financial earning management. (shrink)

Relatively little research has examined the effects of ownership on the firms’ corporate social responsibility (CSR). In addition, most of it has been conducted in the Western context such as the U.S. and Europe. Using a sample of 118 large Korean firms, we hypothesize that different types of shareholders will have distinct motivations toward the firm’s CSR engagement. We break down ownership into different groups of shareholders: institutional, managerial, and foreign ownerships. Results indicate a significant, positive relationship between CSR ratings (...) and ownership by institutions and foreign investors. In contrast, shareholding by top managers is negatively associated with firm’s CSR rating while outside director ownership is not significant. We conclude that different owners have differential impacts on the firm’s CSR engagement. (shrink)

There is theoretical and empirical evidence that firms’ environmental performance has ramifications for their appeal to various stakeholders. Yet, we know little about how this plays out in the context of strategic alliance formation. Stated differently, research is lacking on how ‘green’ prospective alliance partners are estimated by the initiating firm. This article employs strong environmental reputation as a proxy for high environmental performance and explores implications for the well-established alliance formation trust-based mechanism, under the strategic cognition perspective. The ensuing (...) hypotheses are subjected to empirical scrutiny through an experimental method. A random sample of 138 CEOs and top managers of Norwegian manufacturing firms completed a scenario-based questionnaire. The results show that two out of three trust dimensions are affected and, moreover, that two out of three—but not the same—trust dimensions influence partner attractiveness. Several theoretical and managerial implications, and future research opportunities, are derived from the findings. (shrink)

The view that CSR performance can be improved most effectively through external pressures is shown to be invalid for most firms. In exploring why this is the case, the authors demonstrate that most small and medium enterprises are not exposed to the same pressures as large firms, and that this undermines many of the assumptions that underpin the externally driven business case (EDBC) for voluntary CSR practices. The analysis does this by looking at the external drivers of one of the (...) components of CSR; namely, the environmental behaviour of firms. This shows that the strength of the EDBC is largely determined by five factors. Importantly, the analysis provides the basis for the claim that -- and helps to explain why -- the EDBC for voluntary environmental behaviour is likely to remain a weak form of pressure for many small firms. (shrink)

The goal of this paper is to examine whether business performance is affected by the adoption of practices included under the term Corporate Social Responsibility (CSR). To achieve this goal, we analyse the relation between CSR and certain accounting indicators and examine whether there exist significant differences in performance indicators between European firms that have adopted CSR and others that have not. The effects of compliance with the requirements of CSR were determined on the basis of firms included in the (...) Dow Jones Sustainability Index (DJSI), and specific accounting indicators were applied to measure performance. For the purposes of this study, we selected one group of firms belonging to the DJSI and another comprised of firms quoted on the Dow Jones Global Index (DJGI) but not on the DJSI. The sample was made up of two groups of 55 firms, studied for the period 1998–2004. Empirical analysis supports the conclusion that differences in performance exist between firms that belong to the DJSI and to the DJGI and that these differences are related to CSR practices. We find that a short-term negative impact on performance is produced. (shrink)

Managers’ commitment to contribute to sustainable development holds the key to their long-term business success and may be a source of competitive advantage. The managerial perception of business ethics is influenced by the level of moral development and personal characteristics of managers. These perceptions are also shaped by forces existing in the environment of the firm, including available resources, societal expectations, sector, and regulations. The resource-based perspective can thus contribute to the analysis of ethical issues offering important insights on how (...) they can influence the environmental strategy of the firm. The findings of this study show that firm resources have a strong influence on business managers’ ethical attitudes. In addition, the application of resource-based rationales to ethical issues can be justified in the following several ways: it influences a managerial perception of natural environment as a competitive opportunity, it requires investments of financial and human resources, flexibility and speed in the adaptation to environmental changes, and it creates new resource-based opportunities through changes in prevention pollution technology, policy process, and market forces. (shrink)

Previous research on corporate community involvement (CCI) initiatives indicates that such behaviour is critical for building neighbourhood relationships and extending corporate influence in the community, but there is little theoretical work that provides a clear picture of managing the nature of the initiatives from different stakeholder management approaches. Drawing from theoretical insights of stakeholder theory and the concept of social capital, this article proposes nine strategic directions for CCI initiatives, and concludes by discussing the management implications of the proposed strategic (...) directions. Our proposed approaches have the potential to improve current understanding and practice of corporations and their CCI initiatives. (shrink)

Firms are spending billions annually in the name of corporate social responsibility (CSR). Whilst markets are increasingly willing to reward good and responsible firms, they lack the instruments to measure corporate social performance (CSP). To convince investors and other stakeholders, firms invest heavily in building a reputation for good corporate behaviour. This article argues that reputations for CSP are often unrepresentative of true CSP and investigates how differences in 'perceived' and 'actual' – as measured by the Fortune and KLD databases, (...) respectively – can partly be explained by firm characteristics. Amongst other things, it finds that overrated firms are more likely to be relatively big, profitable, operating in non-polluting but competitive industries and with no history of wrong doings to their primary stakeholders. They will also typically spend a lot of effort satisfying the claims of their secondary stakeholders. Above all, the results emphasise the need for researchers to recognise that the databases measure different phenomenon and are not interchangeable. (shrink)

Prior research suggests that ownership structure is associated to corporate social responsibility (CSR) in developed countries. This article examines whether and how ownership structure affects CSR in emerging markets using Chinese firms' social responsibility ranking. Our empirical evidences show that for non-state-owned firms, corporate ownership dispersion is positively associated to CSR. However, for state-owned firms, whose controlling shareholder is the state, this relation is reversed. We attribute the reversed relationship to political interferences and further test this hypothesis by demonstrating that (...) regional economic development is negatively related to CSR for state-owned firms due to decreased political interference in more developed areas. This study is the first to directly examine the relationship between the dispersion of corporate ownership and CSR in emerging markets, and our results depict that it is important to consider ownership type in assessing CSR in emerging market where state ownership is still prevalent such as China. The results also reveal that firm size, profitability, employee power, leverage, and growth opportunity affect CSR in China. (shrink)

The instrumental benefits of firm’s CSR activities are contingent upon the stakeholders’ awareness and favorable attribution. While social media creates an important momentum for firms to cultivate favorable awareness by establishing a powerful framework of stakeholder relationships, the opportunities are not distributed evenly for all firms. In this paper, we investigate the impact of CSR credentials on the effectiveness of social media as a stakeholder-relationship management platform. The analysis of Fortune 500 companies in the Twitter sphere reveals that a higher (...) CSR rating is a strong indicator of an earlier adoption, a faster establishment of online presence, a higher responsiveness to the firm’s identity, and a stronger virality of the messages. Incidentally, the higher CSIR rating is also found to be associated with the stronger virality. Our findings also suggest that socially responsible firms can harvest proactive stakeholders’ participation without investing more resources. As the first study that conceptualizes the social media as a proponent of CSR, this paper contends that “being socially responsible” makes more practical sense for firms with the rise of social media. (shrink)

Do unobservable CEO characteristics predict corporate social performance and are they significantly correlated with CEO compensation? How meaningful is stock-based CEO compensation as a predictor of CSP? To answer these questions, the author empirically examines the relationship between stock-based CEO compensation and CSP while accounting for unobservable CEO characteristics. This study finds that CEO fixed effects account for a significant variance in CSP and that these fixed effects are correlated with CEO compensation variables in a statistically significant manner. The findings (...) suggest that unobservable CEO characteristics should be accounted for when examining the effect of CEO compensation variables on CSP. The findings also highlight the usefulness of stock-based compensation instruments for shareholders and other stakeholders who care about CSP and intend to promote CEO attention to social and ethical issues. (shrink)

Marketers have traditionally evaluated products and practices on the basis of whether something could be sold. It is also important to evaluate products and practices from a societal perspective, "Should a product be sold?" The first idea reflects a managerial orientation and what must be done to sell a product; the second idea reflects a societal orientation and the impact of selling a product. In relation to the second idea, the societal marketing concept was introduced in 1972. There has been (...) little advancement in our understanding of a societal orientation since that time. The current study presents a conceptualization of a societal orientation based on a review of literature and qualitative interviews. The construct was conceptualized as "attention to the long-term well-being of individuals and society at large by enhancing positive impacts from and reducing negative effects associated with production and consumption of a product." Five domains comprising a societal orientation are proposed: physical consequences, psychological well-being, social relationships, economic contribution, and environmental consciousness. (shrink)

In spite of extensive research on corporate social responsibility (CSR) and its link with economic and social performance, few studies have investigated the institutional determinants of CSR. This article draws upon neo-institutional theory and comparative institutional analysis to compare the influence of different institutional environments on CSR policies of European firms. On the basis of a dataset of European firms, we find that firms from the more liberal market economies of the Anglo-Saxon countries score higher on most dimensions of CSR (...) than firms in the more coordinated market economies (CMEs) in Continental Europe. This result lends support to the view of voluntary CSR practices in liberal economies as being a substitute for institutionalized forms of stakeholder participation. Meanwhile, CSR tends not to mirror more institutionalized forms of stakeholder coordination. Instead, in CMEs, CSR often takes on more implicit forms. Our analysis also shows that national institutional and sectoral-level factors have an asymmetric effect - strongly influencing the likelihood of firms adopting 'minimum standards' of CSR, but having little influence on the adoption of 'best practices'. (shrink)

As more and more multi-national companies expand their operations globally, their responsibilities extend beyond not only the economic motive of profitability but also other social and environmental factors. The objective of this article is to examine the impact of national culture and geographic environment on firms’ corporate social performance (CSP). Empirical tests are based on a global CSP database of companies from 49 countries. Results show that the Hofstede’s cultural dimensions are significantly associated with CSP. In addition, European companies are (...) found to out-perform other regions and countries in CSP. (shrink)

Although business and society scholars have sought to demonstrate that corporate social performance (CSP) leads to corporate financial performance (CFP), a complete model of the pathway from CSP to CFP has not been substantiated. One suggestion is that certain indicators of CSP are noticed by stakeholders, who then act in ways that ultimately affect the firm's CFP. The present study focused on the first step in this path: identifying the factors that initially lead a stakeholder group to target a particular (...) firm. Existing theory from the literature on the environmental movement, stakeholder theory, and CSP fostered the development of eight propositions regarding corporate environmental performance. Case studies of five environmental non-governmental organizations (ENGOs) are used to address the propositions. The case studies also supply additional insight into ENGO targeting of particular firms, unrelated to the propositions, thereby facilitating the development of a theoretical model. (shrink)

Recent perspectives on community investments suggest that they are opportunities for firms to create value for shareholders and other stakeholders. However, many corporate managers are still influenced by a widely held belief that such investments erode profits and are therefore unjustifiable from an agency perspective. In this paper, we refine and test theory regarding countervailing forces that influence community-based firm performance. We hypothesize that high levels of available slack will be associated with higher community-based performance, but that this relationship will (...) be moderated by three important governance variables: board independence, investment fund ownership, and CEO ownership. We find support for our hypotheses in longitudinal study of a large sample of U.S. corporations. (shrink)

An emergent body of literature examined why some firms apply some environmental initiatives while other firms do not take responsibility for their natural environment? Thus, firm environmental orientation (responsiveness and performance) are linked in the literature to several variables. Unfortunately, the relationship between firm environmental orientation and either available resources or firm size showed mixed results and inconclusive evidence. Therefore, the aim of this paper is to show empirically how available resources and firm size can explain differences in firm environmental (...) responsiveness and environmental performance. Econometric results of environmental responsiveness using the logistic regression model demonstrated that firm size does appear to add something unique in explaining differences in environmental responsiveness while available resource can be safely dropped from the model. However, econometric analysis of environmental performance using the maximum-likelihood random effects model showed strong evidence that available resources and firm size are significant predictors of firm environmental performance. (shrink)

Organizations differ tremendously in the extent to which they engage in socially responsible behavior and the extent to which this behavior is evaluated by stakeholders. This research examines the complex role of organization size as a driver of perceptions of an organization’s socially responsible behavior and its social performance. Using a unique data set of 302 organizations in the higher education industry, we find that the strength of the organization size–organizational social performance relationship is contingent on whether the organization is (...) autonomous from community stakeholders and resource pressures. Our results show that the organization size–OSP relationship is stronger when stakeholders in the organization’s community are more involved in the organization itself and decision-making processes, and that this relationship is weaker when greater financial and human resources are available to the organization. (shrink)

This paper enquires into the possibility of establishing a causal link between social performance (SP) and financial performance (FP) in corporate social responsibility (CSR). It shows that this endeavour is limited by several biasing factors (such as time horizons, sample choices and the tools chosen to measure SP and FP) and faces the logical fallacy post hoc ergo propter hoc (after this, therefore because of this), which indicates that a sequence of events does not necessarily establish a causal link. The (...) paper contributes to the methodological literature in CSR currently focused on empirical tests aiming to discern the linkages between SP and FP, both by emphasising the interest in interpreting and justifying SP and by suggesting a redirection of empirical efforts towards the understanding of entrepreneurial preference for a specific type of SP. (shrink)

This study uses the institutional perspective to examine the interaction effects between the subnational institutional context and firm-level parameters on corporate environmental behaviors, based on a unique cross-sectional data set of private firms compiled from three different sources in China. Our results suggest that both enforcement stringency of environmental regulations at the provincial-level and private firms’ foreign ownership negatively affect compensation fees, which are levies charged for firms’ emissions. Enforcement stringency also moderates the firm-level relationship between foreign ownership and compensation (...) fees, but such a cross-level moderating effect holds only for private firms with non-HMT investments. (shrink)

This article investigates the moderating effects of organizational social consciousness on the natural environmental competency and innovativeness relationship. Organizational social consciousness reflects the organization’s awareness of its place and contribution to the larger system in which it exists and is developed through an organization’s social responsibility, ethics, culture, corporate values, and the view of its stakeholders. Through our study of key strategic decision makers from organizations located in the USA, we operationalize organizational social consciousness and demonstrate the efficacy of this (...) construct in relation to the organizational-level constructs of environmental management competency and innovativeness. Our results reveal that organizational social consciousness positively strengthens the natural environmental competency to organizational innovativeness relationship. (shrink)

We investigate if private family firms have a greater environmental performance focus than nonfamily firms, and if this relationship is moderated by the strength of the firms’ social embeddedness. We empirically test these issues using a representative sample of 1452 private Australian small and medium-sized enterprises. Contrary to prevailing assumptions and previous indicative findings in the public firm context, our results show that family firms have a lower environmental performance focus than nonfamily firms. However, in cases where the firm is (...) highly embedded in the social community, we find that family firms have a higher environmental performance focus. We explain our unexpected results by considering the role of financial risk in publicly held family firms. Accordingly, we posit that prior findings in the public firm context may be evidence of families expropriating wealth from nonfamily shareholders rather than altruistic pro-environmental behavior. (shrink)

The issue of management’s relations to the environment has received a significant amount of attention in the literature on corporate social responsibility. Yet the influence of religion on managers’ environmental decisions has until now remained unexamined despite its known importance. In this article, we examine the empirical association between religion—primarily Christianity—and the environmental practices a firm’s management undertakes by investigating their OLS, principal component, simultaneous, and endogenous effects. Employing a large and extensive U.S. sample, we find a negative association between (...) the environmental practices initiated by a firm’s managers and the religiosity of the surrounding community, after controlling for various firm and demographic characteristics. In addition, after mitigating endogeneity with the dynamic system generalized method of moment, we still find an inverse association between religiosity and environmental-friendly decisions of management. We interpret these results as providing some support for the “dominion hypothesis” that claims Christian beliefs discourage environmental concern, but not for the “stewardship hypothesis” that implies that Christianity encourages people to “exercise a responsible stewardship over nature.” Nevertheless, additional analysis shows Christian groups differ significantly in how each influences managers’ environmental decisions. (shrink)

A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with (...) anecdotal evidence, we have found a significant association between the ethical commitment of Korean companies and their valuation on the Korean stock market. However, the result reveals that the association between ethical commitment and financial performance is not significantly supported. (shrink)

Two fundamental business ethics issues that repeatedly surface in the academic literature relate to business's role in the development of public policy [Suarez, S. L.: 2000, Does Business Learn? (The University of Michigan Press, Ann Arbor, MI); Roberts, R. W. and D. D. Bobek: 2004, Accounting, Organizations and Society 29(5-6), 565-590] and its role in responsibly managing the natural environment [Newton, L.: 2005, Business Ethics and the Natural Environment (Blackwell Publishing, Oxford)]. When studied together, researchers often examine if, and how, (...) corporations influence environmental policy decisions. Drawing from literatures on corporate political activity, corporate social and environmental performance, and corporate environmental disclosure, we develop and empirically examine two research questions concerning the relations between corporate political expenditures, environmental performance, and environmental disclosure. The questions are: (1) Do corporations that are poorer environmental performers spend more on political activities than their better-performing counterparts? (2) Is there an association between corporations' spending on political activities and the extent of their financial report environmental disclosures? We investigated these questions through analyses of data we gathered on a sample consisting of 119 U.S. environmentally sensitive firms for the 2001-2002 election cycle. After controlling for firm size and specific industry effects, our tests reveal a significant, inverse relationship between firm environmental performance and political spending. This is consistent with the notion that U.S. firms with relatively poorer environmental performance records engage more intensely in corporate political activities as part of their overall strategic management of their relationship with the state. In addition, a significant and positive association between the amount of political spending and the extent of environmental disclosure suggests that environmental disclosure and political spending are both proactive, complementary tactics to strategically manage public policy pressure. If corporations' strategies are intentionally designed to unreasonably limit their environmental responsibilities or to misrepresent firm environmental performance, then we argue that these activities reflect a significant lapse in ethical conduct. (shrink)

The importance imposed on corporate social responsibility is greater in developed economies than in emerging markets. The pressures from various stakeholder groups on the CSR are expected to have substantial spillover impact on companies domiciled in emerging economies that obtain revenues from companies in developed economies. Based on the data from 1,330 listed companies in China, the largest emerging economy in the world, this study provides evidence that the CSR performance of China firms is positively related to the degree of (...) their internationalization, and such a positive association is less pronounced for state-owned enterprises. Our findings support the hypothesis that internationalized companies in emerging economies are motivated to improve their CSR practices to address concerns from their importers or outsourcers in developed economies. (shrink)

This study adds two new perspectives to the long-running debate regarding the linkage between corporate social performance (CSP) and corporate financial performance (CFP): First, we add the aspect of issue materiality and suggest research to put more emphasis on the question of how individual CSP issues can be assumed to systematically influence the business environment from a theoretical point of view. Second, we highlight the measurement level of the underlying data screens as an important determinant of the actual effects of (...) CSP on CFP. Focusing on climate change, we developed a set of questions that cover a firm’s carbon emissions and carbon management strategies. These questions were included in a questionnaire sent out annually to the 2,500 largest companies by market cap within the Dow Jones Global Index by an independent Swiss-based asset management firm. Our results show that when using carbon emissions as an outcome-based measurement, corporate environmental performance pays off. Conversely, when using carbon management as a process-based measurement, we find a negative relationship between corporate environmental performance and CFP. (shrink)

Despite growing evidence of the benefits to a firm of improving corporate social performance (CSP), many firms vary significantly in terms of their CSP activities. This research investigates how the characteristics of the stakeholder landscape influence a firm’s CSP breadth. Using stakeholder theory, we specifically propose that several factors increase the salience and impact of stakeholders’ demands on the firm and that, in response to these factors, a firm’s CSP will have greater breadth. A firm’s CSP breadth is operationalized as (...) the number of different sub-domains of CSR for which a firm has taken positive actions and is captured using a unique dataset from Kinder, Lydenburg, and Domini (KLD). This data set includes positive and negative firm actions across more than 35 different dimensions of socially responsible behavior. Findings based on a longitudinal, multi-industry sample of 447 US firms during the period from 2000 to 2007 demonstrate that firms which: (1) have greater sensitivity to stakeholder needs as a result of the firm’s strategic emphasis on marketing and/or value creation, (2) face greater diversity of stakeholder demands, and (3) encounter a greater degree of scrutiny or risk from stakeholder action have a greater breadth of CSP in response to the stakeholder landscape that they face. (shrink)

The purpose of this article is to examine empirically the impact of environmental certification on firm financial performance (FP). The main question is whether there is a "green premium" for certified firms, and, if so, for what kind of certification. We analyze the short-run and the long-run stock price performance using an event-study methodology on a sample of Canadian and U.S. firms. The results of short-run event abnormal returns indicate that forest certification does not have any significant impact on firm (...) FP regardless of the certification system carried out by firms. Unlike the short-run results, the long-run post-event abnormal returns suggest that forest certification has, on average, a negative impact on firm FP. However, the impact of forest certification on firm FP depends on who grants the certification, since only industry-led certification (Sustainable Forestry Initiative, Canadian Standards Association and ISO14001) are penalized by financial markets, whereas non-governmental organizations—led Forest Stewardship Council certification is not. (shrink)

This study examines the moderating effects of corporate social responsibility (CSR) on the association between market orientation and firm performance in the context of an emerging economy. The results from a sample of firms that operate in Dubai indicate that CSR has a synergistic effect on the impact of market orientation on business performance. The results of our research on the moderating effects of CSR on market orientation subsets reveal that although CSR moderates the association between customer orientation and business (...) performance, it does not moderate the association between competitive orientation and interfunctional coordination and performance. The results of this study are discussed, and implications for practitioners and researchers are presented. (shrink)

Little is known about how and why corporate social responsibility (CSR) emerged in lesser developed countries. In order to address this knowledge gap, we used Chile as a test case and conducted a series of in-depth interviews with leaders of CSR initiatives. We also did an Internet and literature search to help provide support for the findings that emerged from our data. We discovered that while there are similarities in the drivers of CSR in developed countries, there are distinct differences (...) as well. In particular, we found that different sectors drive CSR in Chile. In contrast to other geographies where consumer demand and government regulation provided the impetus for CSR efforts, multinational companies (MNCs) and non-governmental organizations (NGOs) are key actors in Chile. MNCs imported their CSR beliefs, skills, and processes into Chile. Their efforts resulted in a virtuous cycle. Once large domestic firms felt pressured by their MNC rivals, they too adopted CSR initiatives. The ability to manage relationships with multiple stakeholders and perceptions of authenticity were also critical to the success of CSR in Chile. Using network theory as a lens, we suggest that network density and centrality largely determine whether CSR efforts will be authentic. Based on these contentions, we suggest avenues for future research. (shrink)

Although existing research evaluates the growth and motivations behind global corporate social responsibility activity, there is little understanding whether these growing commitments generate strategic benefits to their adherents. In this article, we analyze the organizational attributes that underlie the firm’s ability to generate competitive advantage from the adoption of a global CSR framework. We develop hypotheses on economic and reputational benefits and test whether firm performance, organizational resources, and access to business and CSR networks determine these benefits in CSR frameworks. (...) Results from a survey of 213 Spanish global compact business participants strongly support our arguments. (shrink)

The marketplace has seen significant growth in the demand for ‘ethical’ behavior, and banks are seeking to leverage customers’ perception in order to build a sustainable competitive advantage. In consequence, the concepts of corporate social responsibility and corporate reputation are of vital concern for academics and managers in terms of their potential impact on customers. This study seeks to contribute to the literature by examining the mediating role of corporate reputation on the relationship between perceived corporate social responsibility and customer (...) loyalty. The study also takes into consideration the role played by bank type in the mediation effect. To achieve this aim, a study was performed comprising 572 personal surveys in the Basque Country. The results showed that corporate reputation partially mediated the relation between corporate social responsibility and customer loyalty. On the other hand, bank type is shown not to moderate the mediation effect. The results have important implications for practitioners wishing to manage their relations with customers. (shrink)

In recent years, a growing number of companies in Latin American have initiated specific programs oriented to socially respond to the communities in which they are established. Notwithstanding the importance of these programs and its benefits, it is interesting to note that Latin American countries are different from developed countries in which the trend for corporate social accountability has been initiated and developed. Noting this, the present study develops and tests several hypotheses regarding the effects of corporate social responsibility and (...) work environment on antecedents of company's performance. (shrink)

In recent years, development practice has seen that microfinance institutions are starting to consider their environmental bottom line in addition to their financial and social objectives. Yet, little is known about the characteristics of institutions involved in environmental management. This paper empirically identifies the characteristics of these MFIs for the first time using a sample of 160 microfinance institutions worldwide. Basing our analysis on various econometric tests, we find that larger MFIs and MFIs registered as banks tend to perform better (...) in environmental policy and environmental risk assessment. Furthermore, more mature MFIs tend to have better environmental performances, in particular in providing green microcredit and environmental non-financial services. On the other hand, financial performance is not significantly related to environmental performance, suggesting that ‘green’ MFIs are not more or less profitable than other microfinance institutions. (shrink)