This paper examines the role of mutual funds in corporate social responsibility. Using a fund-level, holdings-based CSR score, we find that CSR-friendly mutual funds improve firms’ CSR standings. This effect is more pronounced for firms with higher mutual fund ownership and stronger corporate governance. We further show that while CSR-friendly mutual funds have influence on almost all CSR categories, they focus on increasing CSR strengths rather than reducing CSR concerns. We also discover that CSR-friendly funds are more likely to vote (...) in favor of CSR proposals, and that firms owned by CSR-friendly funds are more likely to link their CEO compensation to CSR outcomes. These results suggest that actively managed mutual funds, which were previously thought to be indifferent to social and ethical issues, play a significant role in corporate social outcomes of the firms they invest in. (shrink)

Studies show that research and development may not always benefit entrepreneurial firms. This paper focuses on the double-edged effect of R&D activities on attracting institutional investment in entrepreneurial firms. Based on a panel dataset of 700 listed entrepreneurial firms in ChiNext, we document: an inverted-U relationship between R&D intensity and future institutional investment, which we argue is evidence that institutional investors are concerned about R&D overinvestment; an inverted-U relationship between R&D capitalization and future institutional investment, which we argue shows suspicion (...) of the institutional investors towards high R&D capitalization. Furthermore, by splitting institutional investors into venture capitals and non-venture capitals, we confirm that VCs have higher acceptance of both R&D intensity and capitalization as VCs have more expertise to alleviate a certain level of risks. (shrink)

To date, the value of corporate social responsibility (CSR) activities has primarily been measured through the company’s reputation, with little attention given to exploring whether there are internal influences between CSR and other management practices. We argue that the efficacy of CSR extends beyond a company’s reputation for managing social and environmental concerns; in particular, it can influence other business practices such as risk management. Our results suggest that (a) overall, firms with better CSR performance are more likely to adopt (...) integrated risk management practices and (b) CSR activities that target both primary stakeholders and secondary stakeholders are equally important in facilitating the adoption of such risk management practices. Theoretically, we contribute to the CSR literature by providing a possible mechanism for risk reduction and insurance-like effects of CSR. Practically, we provide managerial implications demonstrating that the efficacy of CSR should not be viewed in isolation of other business practices. (shrink)

This study addresses a gap in the literature on corporate governance and corporate social responsibility by investigating whether and how board independence and institutional ownership moderate the relationship between digital transformation and corporate social performance. We find that digital transformation increases CSP using a panel dataset of Chinese publicly listed firms between 2014 and 2018. Moreover, we show that this positive impact is more pronounced when firms have higher proportions of independent directors on the board and institutional owners. These findings (...) contribute to a better understanding of CSR dynamics, supporting the formulation and implementation of efficient CSR strategies in the digital era. (shrink)

This study examines the role of foreign institutional ownership in corporate social responsibility (CSR). Using the Shanghai-Hong Kong Stock Connect as a quasi-natural experiment, our difference-in-differences estimation shows that foreign institutional ownership drives firms’ CSR corporate social responsibility. Further, the positive effect of foreign institutional ownership on CSR is motivated by foreign institutional investors shifting the stakeholders’ logics about social responsibility, not by profit maximization. We also provide evidence that this effect of foreign institutional ownership on CSR is more pronounced (...) among firms with fewer political connections and with non-overconfident CEOs. Overall, our results indicate that foreign institutional investors transmit social norms and shift stakeholders’ logics regarding social responsibility and, in turn, propel firms to improve CSR to satisfy their stakeholders’ expectations. (shrink)

This paper studies the way supplier firms’ corporate social responsibility (CSR) affects their likelihood of being selected as new suppliers. Using a large sample of US public firms with detailed supply chain and CSR data, we provide empirical evidence that corporate customers prefer socially responsible suppliers, and that the effect is more prominent when the supplier industry is more competitive, the customer’s own CSR performance is better, or the supplier and the customer have more similar CSR focuses. Our paper contributes (...) to the literature of instrumental stakeholder theory (IST) by confirming corporate customer attraction as a desirable outcome of supplier CSR engagement. It complements the existing IST studies on customer responses by showing that CSR attracts not only final customers but also corporate customers. Moreover, by focusing on corporate customers’ revealed preferences for socially responsible suppliers, our paper also complements the stated-preference-based evidence in the literature of sustainable supply chain management. Our paper’s findings encourage supplier firm managers to invest in CSR to gain competitive advantages in the form of a higher likelihood of selection while simultaneously making positive contributions to society. (shrink)

The Earth is facing pressing societal grand challenges that require urgent managerial action. Responsible management learning has emerged as a discipline to prepare managers to act as responsible leaders that can effectively address such pressing challenges. This article aims to extend current knowledge on RML in the domain of corporate sustainability through the application of threshold concepts, novel ideas which provide a doorway to new knowledge and transform a learner’s mindset. Specifically, after conducting a systematic review of the management literature, (...) we identify 33 CS threshold concepts that are useful for mainstream managers and practitioners in their RML process. We group them into six CS threshold concept themes that can help managers understand the complexities and interconnectedness that characterize CS. Finally, we map CS threshold concepts with key competences for effective RML. Therefore, our contribution relies on translating existing CS theoretical frameworks into transformative, specific, understandable and applicable pieces of knowledge that might help mainstream managers to embed CS principles in their daily management practices. (shrink)

This study examines how the corporate philanthropy decisions of group-affiliated firms in Korea are made. Based on the attention-based view, we argue that when corporate decision makers at group-affiliated firms focus their attention more on internal markets than external stakeholders because of the firm’s high reliance on intragroup transactions, the firm will decrease its level of corporate philanthropy. We further argue that the relationship will be stronger when governance mechanisms focus on the instrumental value of corporate philanthropy. Using a panel (...) sample of group-affiliated firms in Korea from 2011 to 2015, we find that as intragroup sales increase, the level of corporate philanthropy decreases, and such a negative relationship is stronger when outside director representation and foreign investor ownership are high. Our study suggests that internal dependence and corporate governance mechanisms jointly affect the level of corporate philanthropy at firms in a business group. Thus, this study contributes to the literature on corporate philanthropy, business group, and corporate governance. (shrink)