Several researchers have suggested that a talented, quality workforce will become a more important source of competitive advantage for firms in the future. Drawing on social identity theory and signaling theory, the authors hypothesize that firms can use their corporate social performance (CSP) activities to attract job applicants. Specifically, signaling theory suggests that a firm’s CSP sends signals to prospective job applicants about what it would be like to work for a firm. Social identity theory suggests that job applicants have (...) higher self-images whenworking for socially responsive firms over their less responsive counterparts. The authors conducted an experiment in which they manipulated CSP and found that prospective job applicants are more likely to pursue jobs from socially responsible firms than from firms with poor social performance reputations. The implications of these findings for academicians and practitioners alike are discussed. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" effect. (...) We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)

The contribution of this work is a classification of corporate social action underlying the Social Ratings Data compiled by Kinder Lydenburg Domini Analytics, Inc. We compare extant typologies of corporate social action to the results of our exploratory factor analysis. Our findings indicate four distinct latent constructs that bear resemblance to concepts discussed in prior literature. Akey finding of our research is that positive and negative social action are both empirically and conceptually distinct constructs and should not be combined in (...) future research. Additionally, we recommend that some prior research results be reconsidered to determine whether these newly derived measures might clarify some previous findings. (shrink)

We argue that corporate social performance (CSP) has become a legitimizing identity (brand) for researchers in the business and society field, but it has not developed into a viable theoretical or operational construct. Because measuring CSP is contingent on the operational setting (industry, issues, etc.), it is difficult to produce worthwhile comparisons across studies or generalizing beyond the boundaries of a specific study. The authors suggest that researchers remove the CSP label from their operational variables, and instead narrowly define their (...) studies in operational terms. They provide aworking example of the proposed research direction by examining the theory underlying the popular CSP–financial performance (FP) debate. In the authors’ conceptualization, stakeholder action provides the underlying logic connecting CSP-FP, and we recast the research question to investigate the conditions under which stakeholders will take action to influence the focal organization and when those actions will influence the CSP-FP link. (shrink)

After exploring MacIntyre’s (1985) practice—institution distinction, the article demonstrates its applicability to business-as-practice and to corporations as institutions. It then considers the implications of MacIntyre’s schema to ethical schizophrenia, to the claim that themarket is a source of the virtues and to the opposite claim that capitalism corrodes character. A fully worked out modern virtue ethics, based on MacIntyre’s work, is then established and the claim is made and substantiated that such an understanding of MacIntrye’s work revitalises it and makes (...) it directly applicable to business and to corporations. (shrink)

Building on earlier work on the relationship between corporate social performance (CSP) and a firm’s financial performance, this integrative empirical study supports the theoretical argument that the higher a firm’s CSP the lower its financial risk. Specifically, the relationship between CSP and risk appears to be one of reciprocal causality, because prior CSP is negatively related to subsequent financial risk, and prior financial risk is negatively related to subsequent CSP. Additionally, CSP is more strongly correlated with measures of market risk (...) than measures of accounting risk. Of all CSP measures, reputation for social responsibility appears to be the most important one in terms of its risk implications. (shrink)

The results of a survey of business professionals verified a relationship between perceptions of corporate citizenship and organizational commitment. More important, the results demonstrated that the relationship between corporate citizenship and organizational commitment was stronger among employees who believe highly in the importance of the social responsibility of businesses. The results also indicated that the ethical measure of corporate citizenship was a stronger predictor of organization commitment than the economic, legal, and discretionary measures. Last, the results revealed that the discretionary (...) measure was more strongly associated with organizational commitment among female employees. (shrink)

This perspectives article seeks to comment and reflect on my 1999 BAS article titled “Corporate Social Responsibility: Evolution of a Definitional Construct,” and subsequent writings addressing these same topics. First, perspectives on the 1950-1999 period are offered. Second, reflections on the 2000-2020 period are presented. Finally, thoughts about the future and the new normal for CSR are set forth. Hopefully, the observations presented will stimulate further thinking on this important concept. And, it will be interesting to all of us to (...) see where the dust settles when the pandemic ends and organizations have had a chance to re-imagine or reset their missions, goals, and processes with respect to CSR. (shrink)

Prior research on sustainability in business often assumes that decisions on social and environmental investments are made for instrumental reasons, which points to causal relationships between corporate financial performance and corporate social and environmental commitment. In other words, social or environmental commitment should predict higher financial performance. The theoretical premise of sustainability, however, is based on a systems perspective, which implies a tighter integration between corporate financial performance and corporate commitment to social and environmental issues. In this paper, we describe (...) the important theoretical differences between an instrumental and integrative logic in managing business sustainability. We test the presence of each logic using data from 738 firms over 13 years and find evidence of integrative logic applied in business. (shrink)

Prior studies have advanced our knowledge of the individual determinants of corporate philanthropy; however, little empirical research has been conducted on how these determinants combine to influence giving. In this study, the authors develop and test an integrated model of the relationship between firm resources and corporate philanthropy as mediated by managerial discretion and managerial values. In addition, the authors offer organizational slack as an alternative measure of organizational resources. As predicted, the results show that firm resources have a positive (...) effect on corporate philanthropy. This effect is fully mediated by managerial discretion and partially mediated by managerial values. (shrink)

We review some 30 years of academic research on corporate philanthropy, taking stock of the current state of research about this rising practice and identifying gaps and puzzles that deserve further investigation. To do so, we examine a total of 162 academic papers in the fields of management, economics, sociology, and public policy, and analyze their content in a systematic fashion. We distinguish four main lines of inquiry within the literature: the essence of corporate philanthropy, its different drivers, the way (...) it is organized, and its likely outcomes. After reviewing the main findings of the literature, we build on several research gaps to highlight directions for future research on corporate philanthropy with an interest in strengthening our understanding of this fascinating phenomenon at the crossroads of business and society. (shrink)

The relationship between corporate social responsibility and corporate financial performance has long been a central and contentious debate in the literature. However, prior empirical studies provide indefinite conclusions. The purpose of this study is to review systematically and quantify the CSR–CFP link in a meta-analytic framework. Based on 119 effect sizes from 42 studies, this study estimates that the overall effect size of the CSR–CFP relationship is positive and significant, thus endorsing the argument that CSR does enhance financial performance. Furthermore, (...) this work sheds light on the causal relationship between CSR and CFP. Subsequent financial performance is associated with prior social responsibility, while the reverse direction is not supported. This finding supports the instrumental stakeholder theory. As predicted, the meta-analysis results indicate that the measurement strategies of the two key constructs of CSR and CFP explain some variations of the CSR–CFP relationship. Last, this study examines the moderating effect of the environmental context on the CSR–CFP link. This work proposes that CSR in the developed world, with a relatively mature institutional system and efficient market mechanism, will be more visible than CSR in the developing world. The results show that the CSR–CFP relationship is stronger for firms from advanced economies than for firms from developing economies. (shrink)

The purpose of this paper is to provide a basis for a systematic development of signaling theory on CSR initiatives. The paper proposes signaling theory as a framework supportive of a strategic CSR approach; maps extant research on signaling through CSR initiatives; offers a comprehensive assessment of the most diffused CSR initiatives and discusses their eligibility as signaling devices; and outlines a research agenda to further develop and test signaling theory in business ethics. Specifically, the study reconsiders some key assumptions, (...) identifies key gaps in empirical validation, and proposes directions to extend multiple signal, signaling pattern, and target cases. (shrink)

This paper explores the relationship between religious denomination and individual attitudes to Corporate Social Responsibility (CSR) within the context of a large sample of over 17,000 individuals drawn from 20 countries. We address two general questions: do members of religious denominations have different attitudes concerning CSR than people of no denomination? And: do members of different religions have different attitudes to CSR that conform to general priors about the teachings of different religions? Our evidence suggests that, broadly, religious individuals do (...) not prioritise the responsibilities of the firm differently, but do tend to hold broader conceptions of the social responsibilities of businesses than non-religious individuals. However, we show that this neither true for all religious groups, nor for all areas of CSR. (shrink)

A primary issue in the field of business and society over the past 25 years has been the relationship between corporate social performance and corporate financial performance. Recently, Griffin and Mahon (1997) presented a table categorizing studies that have investigated this relationship. Motivated by concerns with this table, as well as a desire to account for progress in research in this area, the authors reconstructed it. The authors present a portrait of this relationship that is (a) substantially different from that (...) shown in the Griffin and Mahon table and (b) more consistent with the latest research on the topic. (shrink)

There are relatively few empirical studies on the impacts of corporate social responsibility policies and programs. This article addresses the research gap by analyzing the incidence of, and the conditions that affect, decoupling among CSR policies, implementation of CSR programs, and CSR impacts for various environmental and social issues. Complete decoupling is a condition of full divergence among policies, programs, and impacts amounting to purely ceremonial CSR. Using ratings from a sustainability rating agency on a sample of about 1,000 large (...) companies in 24 countries, the authors find empirical evidence not supporting a conclusion of complete decoupling. The empirical evidence suggests four levels of nondivergence in the sample. First, for most CSR issues examined, CSR policies of high quality do have relatively strong effects on CSR implementation. Second, CSR programs of high quality do have relatively strong effects on CSR impacts. Third, for most CSR issues, even low-quality CSR policies enforce the incidence and quality of programs in comparison with having no policy at all. Fourth, weak programs have more impact on the realization of CSR goals than having no program at all. The authors also find that the quality of CSR reporting and locating the responsibility for CSR at the board level reduce decoupling by strengthening the quality of CSR programs. (shrink)

This study investigates financial correlates of corporate philanthropy in Fortune 1000 companies using structural equation modeling. The results suggest that cash flow (one of the most discretionary types of organizational slack) has a significant impact on a firm’s cash donations to charitable causes, but monetary donations do not affect firm financial performance. These findings support the accepted view of corporate philanthropy as a discretionary social responsibility and the traditional thinking about firm giving in the business and society literature—that doing well (...) enables doing good. Contrary to some contemporary thinking, the findings imply no significant effect on profits from corporate generosity. (shrink)

In this article, we examine the empirical association between firm value and CSR engagement for firms in sinful industries, such as tobacco, gambling, and alcohol, as well as industries involved with emerging environmental, social, or ethical issues, i.e., weapon, oil, cement, and biotech. We develop and test three hypotheses, the window-dressing hypothesis, the value-enhancement hypothesis, and the value-irrelevance hypothesis. Using an extesive US sample from 1995 to 2009, we find that CSR engagement of firms in controversial industries positively affects firm (...) value after controlling for various firm characteristics. To address the potential endogeneity problem, we further estimate a system of equations and change regression and continue to find a positive relation between CSR engagement and firm value. Our findings support the value-enhancement hypothesis and are consistent with the premise that the top management of US firms in controversial industries, in general, considers social responsibility important even though their products are harmful to human being, society, or environment. (shrink)

While there are growing bodies of research examining both the differences between strongly and poorly socially performing firms, and the impact of firm leaders on other strategic outcomes, little has been done in examining the effect of firm leaders on corporate social performance (CSP). This study directly addresses this issue by using upper echelon theory, and the KLD Research Analytics CSP ratings, to show that observable CEO characteristics predict differences in CSP between firms, even when firm and industry characteristics are (...) controlled for. Using a sample of 650 public US firms I find that strong or exemplary CSP, as measured by the strengths categories of KLD's ratings, is positively related to the CEO having a bachelor's degree in humanities, having a breadth of career experience and being female. I find that KLD strength ratings are negatively related to the CEO having a bachelor's degree in economics and to their level of short-term compensation. Preliminary tests of causality support the assertion that these effects reflect CEO discretion rather than being an artifact of reverse causality. Significant relationships between the CEO characteristics and poor social performance as measured by the concerns categories of KLD's ratings are not found. This suggests that CEOs have more discretion in influencing strong and exemplary social performance than in impacting poor CSP. Implications, particularly for economics education, are discussed. While there are many fruitful directions for future research, the benefits and challenges to conducting similar studies in other countries is focused upon to correspond to the global nature of this special issue. (shrink)

The Global Reporting Initiative (GRI) has successfully become institutionalized as the preeminent global framework for voluntary corporate environmental and social reporting. Its success can be attributed to the “institutional entrepreneurs” who analyzed the reporting field and deployed discursive, material, and organizational strategies to change it. GRI has, however, fallen short of the aspirations of its founders to use disclosure to empower nongovernmental organizations (NGOs). The authors argue that its trajectory reflects the power relations between members of the field, their strategic (...) choices and compromises, their ability to mobilize alliances and resources, and constraints imposed by the broader institutions of financial and capital markets. The authors draw three notable implications from this study. First, institutional theory needs to pay more attention to economic structures, strategies, and resources. Second, institutional entrepreneurship by relatively weak societal groups such as NGOs is inherently constrained by the structural power of wider institutions and by the compromises required to initiate change. Third, the strategies of NGOs represent a form of power capable of shifting, if not transforming, the field of corporate governance. (shrink)

This study reviews and synthesizes the contemporary business literature that focuses on the role of corporate social responsibility to enhance firm value. The main objective of this review is to proffer a precise understanding of what has already been investigated and the findings of those investigations regarding the value-enhancing capabilities of CSR for public firms. In addition, this review identifies gaps in the existing literature, evaluates inconsistent findings, discusses possible data sources for empirical researchers, and provides direction for exploring other (...) promising avenues in future studies. The thrust of the CSR literature largely acknowledges the value-enhancing capabilities of firms’ social and environmental activities. However, the predominance of inconsistent theoretical grounds in major CSR-benefits-related areas suggests that there is ample room for future research to contribute to the extant literature. Anecdotal evidence, the prevalence of theoretical arguments, and the availability of large cross-sectional firm-level data suggest that future research will enrich the literature by investigating the real insights behind several unanswered questions, by establishing implicit understandings regarding recognized findings, and by developing new theories in this emerging field. (shrink)

Recent downward trends in corporate giving have renewed interest in the factors that shape corporate philanthropy. This paper examines the relationships between charitable contributions, firm size and industry. Improvements over previous studies include an IRS data base that covers a much broader range of firm sizes and industries as compared to previous studies and estimation using an instrumental variable technique that explicitly addresses potential simultaneity between charitable contributions and profitability. Important findings provide evidence of a cubic relationship between charitable giving (...) and firm size and evidence of strong industry effects. The plus-minus-plus regression coefficient sign pattern for the cubic firm size model suggests that small and large firms give more relative to total receipts with lower giving ratios among medium size firms. One interpretation for this finding is that small firms are close to the communities they serve while high visibility creates a need for large firm philanthropy. Strong industry effects provide evidence of inter-industry differences in giving culture and/or different public relations requirements across industries. (shrink)

This study tests a model that links stakeholder pressure to the implementation of corporate social responsibility activities and market performance. Stakeholder groups and competitors might exert pressure on companies to implement CSR, which could lead to positive effects on market performance. Using structural equation modeling, the authors find that stakeholders and competitors exert pressure differently. The effect of CSR implementation on market performance is moderated by market dynamism: It affects market performance more in dynamic environments. The authors discuss implications for (...) both companies and stakeholders. (shrink)

Review of extant research on the corporate environmental performance (CEP) and corporate financial performance (CFP) link generally demonstrates a positive relationship. However, some arguments and empirical results have demonstrated otherwise. As a result, researchers have called for a contingency approach to this research stream, which moves beyond the basic question “does it pay to be green?” and instead asks “when does it pay to be green?” In answering this call, we provide a meta-analytic review of CEP–CFP literature in which we (...) identify potential moderators to the CEP–CFP relationship including environmental performance type (e.g., reactive vs. proactive performance), firm characteristics (e.g., large vs. small firms), and methodological issues (e.g., self-report measures). By analyzing these contingencies, this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the CEP–CFP research. Some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms, US firms seem to benefit more than international counterparts, and environmental performance seems to have the strongest influence on market-measures of financial performance. (shrink)

ABSTRACT:This study examines whether the empirical evidence on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) differs depending on the publication outlet in which that evidence appears. This moderator meta-analysis, based on a total sample size of 33,878 observations, suggests that published CSP-CFP findings have been shaped by differences in institutional logics in different subdisciplines of organization studies. In economics, finance, and accounting journals, the average correlations were only about half the magnitude of the findings published (...) in Social Issues in Management, Business Ethics, or Business and Society journals (mean corrected correlation coefficientof.22 vs..49, respectively). Specifically, economists did not find null or negative CSP-CFP correlations, and average findings published in general management outlets (=.41) were closer to Social Issues in Management, Business Ethics, and Business and Society results than to findings reported in economics, finance, and accounting journals. (shrink)

Using a large sample of 3,040 U.S. firms and 16,606 firm-year observations over the 1991–2010 period, we find strong evidence that firm internationalization is positively related to the firm’s corporate social responsibility rating. This finding persists when we use alternative estimation methods, samples, and proxies for internationalization and when we address endogeneity concerns. We also provide evidence that the positive relation between internationalization and CSR rating holds for a large sample of firms from 44 countries. Finally, we offer novel evidence (...) that firms with extensive foreign subsidiaries in countries with well-functioning political and legal institutions have better CSR ratings. Our findings shed light on the role of internationalization in influencing multinational firms’ CSR activities in the U.S. and around the world. (shrink)

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)

In his invited essay for Business & Society’s 60th anniversary, Archie B. Carroll refers to human rights as “a topic that holds considerable promise for CSR [corporate social responsibility] researchers in the future.” The objective of this article is to unpack this promise. We discuss the momentum of business and human rights in international policy, national regulation, and corporate practice, review how and why BHR scholarship has been thriving, provide a conceptual framework to analyze how BHR and corporate social responsibility (...) relate to each other, and provide a research agenda outlining how BHR can expand business and society scholarship in general and one of its foundational constructs, CSR, in particular, beyond the current confines of the business and society field. (shrink)

The aim of this paper is to shed some light on understanding why companies adopt environmentally responsible behavior and what impact this adoption has on their performance. This is an empirical study that focuses on the United Nations (UN) Global Compact (GC) initiative as a Corporate Social Responsibility (CSR) mechanism. A survey was conducted among GC participants, of which 29 responded. The survey relies on the anticipated and actual benefits noted by the participants in the GC. The results, while not (...) conclusive, indicate that companies have more than one reason for adopting environmentally responsible behavior and that ethical and economic reasons co-exist. In terms of performance, the impact of participation in the GC seems to be particularly high in securing network opportunities and improved corporate image. The results indicate that companies that have participated many years in the GC, have submitted the most projects and have attended the most GC meetings also regard their CSR involvement as having had a strong, positive influence on their market performance. GC participation does not result in significant cost advantages, but this does not seem to have been regarded as a goal anyway. Costs seem to be affected to a␣large extent by existence of in-house research and␣development and the capability of developing environmentally sound technologies. Overall, the company receives both ethical and economic benefits from joining the GC. (shrink)

The empirical relationship between a firm’s social performance and its financial performance is still not well established in the literature. Despite more than 30 years of research and more than 100 empirical studies on the issue, the results are still mixed. We argue that the heterogeneous results found in previous studies are not due exclusively to problems related with the measurement instruments or the samples used. Instead, we posit that a more fundamental problem related with the endogeneity of social strategic (...) decisions could be driving most of the empirical findings. We show that, using a panel data of 658 firms from 1991 to 2005, how some of the results found in previous research change, and some are even reversed when endogeneity is properly taken into account. (shrink)

Organizations that believe they should "give something back" to the society have embraced the concept of corporate social responsibility (CSR). Although the theoretical underpinnings of CSR have been frequently debated, empirical studies often involve only limited aspects, implying that theory may not be congruent with actual practices and may impede understanding and further development of CSR. The authors investigate actual CSR practices related to five different stakeholder groups, develop an instrument to measure those CSR practices, and apply it to a (...) survey of 401 U.S. organizations. Four different clusters of organizations emerge, depending on the CSR practice focus. The distinctive features of each cluster relate to organizational demographics, perceived influence of stakeholders, managers' perceptions of the influence of CSR on performance, and organizational performance. (shrink)

Corporate Social Responsibility (CSR) programs are increasingly popular corporate marketing strategies. This paper argues that CSR programs can fall along a continuum between two endpoints: Institutionalized programs and Promotional programs. This classification is based on an exploratory study examining the variance of four responses from the consumer stakeholder group toward these two categories of CSR. Institutionalized CSR programs are argued to be most effective at increasing customer loyalty, enhancing attitude toward the company, and decreasing consumer skepticism. Promotional CSR programs are (...) argued to be more effective at generating purchase intent. Ethical and managerial implications of these preliminary findings are discussed. (shrink)

ABSTRACT:Globally, family firms are the dominant organizational form. Family involvement in business and unique family dynamics impacts organizational strategy and performance. However, family control of business has rarely been adopted as a discriminating variable in the organizations and the natural environment (ONE) research field. Drawing on the theory of planned behavior we develop a conceptual framework of the drivers of proactive environmental strategy (PES) in family firms. We argue that family involvement in business influences the attitudes, subjective norms, and perceived (...) behavioral control of a firm’s dominant coalition. Together these factors determine the extent of the dominant coalition’s intentions to undertake PES. Further, family firms with lower levels of relationship conflict within the controlling family will be more successful in translating the dominant coalition’s intentions to allocate resources for the pursuit of PES. Research implications of the theory are discussed. (shrink)

With a meta-analysis of 85 studies and 190 experiments, the authors test the relationship between socially responsible investing and financial performance to determine whether including corporate social responsibility and ethical concerns in portfolio management is more profitable than conventional investment policies. The study also analyses the influence of researcher methodologies with respect to several dimensions of SRI on the effects identified. The results indicate that the consideration of corporate social responsibility in stock market portfolios is neither a weakness nor a (...) strength compared with conventional investments; the heterogeneous results in prior studies largely reflect the SRI dimensions under study. (shrink)

This study examines the relation between firms' corporate philanthropic giving and their performance in three other social domains - employee relations, environmental issues, and product safety. Based on a sample of 384 U.S. companies and using data pooled from 1998 through 2000, we find that worse performers in the other social areas are both more likely to make charitable contributions and that the extent of their giving is larger than for better performers. Analyses of each separate area of social performance, (...) however, indicate that the relation between giving and negative social performance only holds for the environmental issues and product safety areas. We find no significant association between corporate philanthropy and employee relations concerns. In general, these findings suggest that corporate philanthropy may be more a tool of legitimization than a measure of corporate social responsibility. (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)

This article examines the concurrent validity of the Kinder, Lydenberg, Domini Research & Analytics corporate social performance measures. Because KLD changed its evaluation methods to richer approaches, a new look at the concurrent validity of the indicators is necessary. To do this new look, the authors examine the new “Binary” and “Continuous” versions of the KLD and compare them with previous versions of KLD. The results suggest that the continuous scores provide better measurement characteristics than do the binary version. Overall, (...) the new versions of the KLD data demonstrate concurrent validity with the original version. (shrink)

Research based on the behavioral theory of the firm (BTOF) argues that firms will actively adopt strategic actions to respond to performance that falls below aspirations, that is performance shortfalls. However, most previous studies have focused on market-related strategic actions, paying less attention to the impact of performance shortfalls on non-market-related strategic actions, especially corporate social responsibility (CSR) and corporate social irresponsibility (CSI). In this study, we propose that firms facing performance shortfalls are likely to reduce CSR levels and increase (...) CSI levels. In addition, we also propose that board characteristics (board size, board age and board tenure) have a significant moderating effect on the above relationship. Empirical analyses based on an unbalanced panel data of China's listed firms from 2010 to 2018 show that our arguments are largely supported. (shrink)

This article explores the role of financial markets for sustainable development. More specifically, the authors ask to what extent financial markets foster and facilitate more sustainable business practices. The authors highlight that their current role is rather modest and conclude that, on the old paths, a paradoxical situation exists. On one hand, financial market participants increasingly integrate environmental, social, and governance criteria into their investment decisions, whereas on the other hand, in terms of organizational reality, there seems to be no (...) real shift toward more sustainable business practices. The authors identify two main challenges within the field of sustainable investments that are relevant for entering new avenues that may help overcome this situation. First, a reorientation toward a long-term paradigm for sustainable investments is important. Second, ESG data must become more trustworthy. From a theoretical point of view, the authors finally highlight the potential market consequences when ESG investment criteria are used. (shrink)

. This paper examines the association between long-term compensation and corporate social responsibility for 90 publicly traded Canadian firms. Social responsibility is considered to include concerns for social factors and the environment, 564-578; Kane, E. J., 341-359). Long-term compensation attempts to focus executives efforts on optimizing the longer term, which should direct their attention to factors traditionally associated with socially responsible executives. As hypothesized, we found a significant relationship between the long-term compensation and total CSR weakness as well as the (...) product/environmental weakness dimension of CSR. In addition, we found a marginally significant relationship between long-term compensation and total corporate responsibility. Our findings are that executives long-term compensation is associated with a firms environmental actions, and that firms that utilize long-term compensation are more likely to mitigate product/environment weaknesses than those that do not. Implications for practice and research are discussed. (shrink)

Concentrated attention on institutional investors' activism has been perceived in the last few decades and further intensified in the post‐Enron era. A new area of particular significance that has emerged is institutional investors' growing awareness and practice of socially responsible investment (SRI). This article starts by reviewing the importance of institutional investor activism and the historical implication of SRI. Significantly, various elements that give rise to the growth of SRI in the modern business world are considered in detail. It is (...) recognized that, although current empirical evidence suggests ambiguous effects of SRI, the positive impact of institutional investors' activism on SRI is likely to have been undermined due to the underdevelopment of evaluation systems, and SRI should stand out as a good investment option for its joint financial and societal concerns. Nevertheless, obstructions still exist in the exercise of investor activism and the pursuit of SRI strategy, which implies that, at least in the near future, SRI strategy will remain as a minor investment trend for institutional investors in Anglo‐American countries. Additional regulatory methods and awarding schemes are, therefore, expected to motivate institutional investors' activism on SRI, and subsequently to promote global sustainability. (shrink)

The inconclusiveness of previous research on the association between gender diverse boards and corporate social performance has led us to revisit the question in light of stakeholder management and institutional theories. Given that corporate social responsibility is a multidimensional concept, we test the influence of GDB on various groups of stakeholders. By considering the interaction between stakeholders’ power and directors’ personal motivations toward the prioritization of stakeholders’ claims, we find that GDB are positively related to CSR dimensions that are related (...) to less powerful stakeholders such as the environment, contractors, and the community. However, GDB do not appear to have a significant impact on CSR dimensions that are associated with stakeholders who benefit from more institutionalized power, such as employees and customers. (shrink)

The relationship of corporate social responsibility to risk management has been treated sporadically in the business society literature. Using real options theory, I develop the notion of corporate social responsibility as a real option its implications for risk management. Real options theory allows for a strategic view of corporate social responsibility. Specifically, real options theory suggests that corporate social responsibility should be negatively related to the firm’s ex ante downside business risk.

Focusing on the corporate social responsibility (CSR) implementation process, we analyze how institutional complexity that arises from tensions between social and environmental elements and economic and technical concerns is managed by CSR managers. We further question how these micro-level processes interact with organizational-level processes over time. Our research is a 24-month qualitative process study in which we followed CSR managers. The study’s results allow us to distinguish between four strategies that CSR managers use to promote CSR implementation and to cope (...) with tensions. Our results further indicate that organizational characteristics influence the intensity with which these strategies are applied and that the intensity of strategy application affects organizational behavior in the course of time. Through the discussion of these findings, our study contributes to the research on micro-level processes that occur in response to complex institutional demands as well as to the development of a comprehensive, multilevel approach to CSR implementation. (shrink)

Corporate management is torn between either focusing solely on the interests of stockholders or taking into account the interests of a wide spectrum of stakeholders. Of course, there need be no conflict where taking the wider view is also consistent with maximising stockholder wealth. In this paper, we examine the extent to which a conflict actually exists by examining the relationship between a company's positive and negative corporate social responsibility activities and equity performance. In general, we find little evidence to (...) suggest that managers taking a wider stakeholder perspective will jeopardise the interest of its stockholders. However, our findings do suggest that the market is not only influenced by the independent CSR activities, but also the totality of these activities and that the facets that they value do vary over time. It seems that most recently, the market has valued most firms that satisfied minimum requirements in the areas of diversity and environmental protection but were most proactive in the area of employee-relations. (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)

Rowley and Berman (2000) are tackling the right questions in their article. Three critical questions, in essence, are asked: What is corporate social performance (CSP)? What does it mean (i.e., CSP measures)? And, where does the future lie with CSP? In answering these questions, they are creating a CSP research agenda for the 21st Century. While agreeing, to a large extent, with their new set of questions, this paper questions their rationale for what is currently wrong with CSP and focuses (...) on extending future research directions. Specifically, this paper suggests that existing research in related disciplines can help accelerate our understanding of CSP. Marketing (i.e., customer-organization relations) and human relations (i.e., employee-organization relations) literatures, for example, already critically examine the conditions under which various organizational practices, policies, and procedures flourish. These boundary spanning functions provide newinsights that can lead to a broader, richer, and more systematic understanding of the complex CSP construct. (shrink)

Although corporate decision makers may justify charitable contributions on strategic grounds, extremely large corporate philanthropic contributions may beperceived by shareholders as unnecessary. If stockholders attempt to limit corporate philanthropy, then governance mechanisms should put a cap on giving amounts. Using a matched-paired sample to control for industry and company size, theauthors compared big givers and small givers. The authors find that blockholders and institutional owners limit corporate philanthropy. This suggests that high levels of corporate philanthropy may be perceived as excessive (...) by influentialstockholders, and some governance mechanisms act to curtail it. (shrink)