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)

A large body of literature looks at how firms develop and maintain their reputation. Little is known, however, about factors leading to a damaged corporate reputation. In this article, the authors compare two sets of predictors of reputational damage following a reported breach of norms: the characteristics of the breach and the characteristics of the actor reporting the breach. Theoretically, the authors argue that the latter is likely to prevail over the former. The authors test this proposition in the highly (...) normative context of corporate social responsibility (CSR). Building on a global data set of over 8,600 CSR-related norm breaches, directed against 451 firms on the Fortune ranking reputation over the 2006-2009 period, the authors find empirical support for the idea that reputation damage is not really driven by the severity and novelty of the allegation, but by the type of source reporting the issue as well as the credibility of this source. Hence, these results lend some support to a socially constructed view of reputational damage, in which being portrayed by prominent actors as deviating from the norm is more important than the actual deviation from the goal of the norm itself. (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)

This article investigates the effects of firm size, profitability, industry affiliation, and the business cycle on retailer philanthropy. The importance of industry and firm effects on giving was analyzed with regression models using industry-fixed effects as well as firm strategy variables. The analysis included instrumental variables methodology to account for simultaneity in the charitable giving–profits relationship. Data were gathered from the IRS Corporate Statistics of Income Sourcebook, data that provide firm size class measures covering the entire firm size distribution ranging (...) from small retailers up to large multi-national retail firms. Retailer philanthropy was measured as the ratio of charitable contributions to total receipts. Important findings include a cubic relationship between retailer philanthropy and firm size; industry effects stronger than those observed for retail profit; and the absence of business cycle effects. The empirical research relating retail charitable giving to firm attributes including firm size and advertising, industry and business cycle factors are unique in the business ethics literature. Prior studies regarding the importance of industry on charitable giving utilized data across broad sectors of the economy. Firms from different sectors could be expected to differ in philanthropic approach due to differences in public contact as well as differences in public relations exposure. The strong industry effects reported for this sample of exclusively retail firms, with similar public contact, provide strong evidence for the importance of industry in determining firms’ charitable strategies. (shrink)

Corporate reputation is decisive for stakeholders’ supporting or repelling behavior and, therefore, one of firms’ most valuable intangible resources. Drawing on signaling theory, this paper focuses on the usefulness of voluntarily provided corporate reputation disclosures (CRDs) and examines their impact on stakeholders’ attitudinal and behavioral outcomes. Our experimental vignette studies reveal that CRDs reduce stakeholders’ information asymmetries, which positively affects perceived organizational performance and corporate reputation as well as stakeholders’ purchase, investment, and employment intentions. The relationships between CRDs and stakeholders’ (...) behavioral intentions are sequentially mediated by changes in the perceived organizational performance and corporate reputation. This implies that stakeholders use the signals transmitted by CRDs to adjust their perceptions of a firm’s organizational performance and corporate reputation, which ultimately induces their behavioral outcomes. Overall, our empirical results show the usefulness of CRDs for firms in effectively developing stakeholder relationships and, thereby, contributing to assure their going concern. For stakeholders, CRDs improve efficiency in evaluating a firm’s future development. (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 purpose of the current paper is to introduce the theoretical arguments of optimal distinctiveness literature in studying the relationship between CEO narcissism and corporate social responsibility. We focus on CSR scope conformity and CSR emphasis differentiation and introduce CEO narcissism as an important determinant of the extent to which the firm responds to these two types of strategic pressures. Our analysis is based on a sample of 509 firm-year observations over the 2006–2013 period. Fixed effects regression technique is used (...) to test our hypotheses. Our findings provide evidence that CEO narcissism is negatively related to CSR conformity and positively related to CSR differentiation strategies. We also find evidence that firm prior performance will moderate the relationship between CEO narcissism and CSR conformity but not CSR differentiation. (shrink)