Abstract

Instrumental CSR perspectives suggest that selective investments in prosocial, voluntary behaviors are largely profit-driven, whereas institutional theory emphasizes legitimacy-seeking as a significant mechanism for explicit CSR disclosure. We test both profit-seeking and legitimacy-seeking mechanisms, derived from empirical findings of Western-oriented firms, in a unique setting to understand voluntary CSR disclosure in an Eastern context: South Korea. By examining voluntary disclosure of the 500 largest South Korean firms’ social contributions from 2006 to 2012, a time period purposefully encompassing the global financial crisis, we highlight the limitations of corporate social responsibility theorizing when East meets West. Our findings suggest profitability is not significantly related to voluntary disclosure as predicted by Western, instrumental CSR literature. Overall, we found support for legitimacy-seeking mechanisms as the likelihood of disclosure increased for publicly listed firms and those employing a larger number of workers for all years between 2006 and 2012. Further, firms affiliated with chaebols are more likely to disclose prosocial behaviors prior to, and after, the GFC compared to firms that are not affiliated with chaebols regardless of profitability further suggesting that legitimacy-seeking mechanisms may underlie CSR reporting in Korean firms.