An emerging body of literature has highlighted a gap in our understanding of the extent to which the salience attached to human rights is likely to influence the extent to which an individual takes account of Corporate Social Responsibility in decision making. The primary aim of this study is to begin to address this gap by understanding how individuals attribute different emphasis on specific aspects of human rights when making decisions to purchase, work, invest or support the community operations for (...) socially responsible organisations. In order to achieve this objective, a survey instrument was administered to professionals in Russia and Bulgaria. Our data indicate that there is a significant correlation between individuals’ sensitivity towards different components of human rights and their perceptions of the importance of CSR in decision making. Specifically, the recognition of political rights was strongly associated with the willingness to purchase, invest, seek employment and support socially responsible firms. Our analysis also outlines significant differences between the Russian and the Bulgarian samples with regard to the manners in which individuals rate the importance of civil, political and economic human rights. (shrink)

This article presents the results of a study that analysed whether social responsibility had any bearing on the decision making of institutional investors. Being that institutional investors prefer socially aligned organizations, this study explored to what extent the corporate actions and/or social/environmental investments influenced their decisions. Our results suggest that there are specific variables that affect the perceived value of the organization, leading to decisions to not only invest, but whether to hold or sell the shares, and therefore having a (...) consequential impact on the capital market’s valuation. (shrink)

The relationship between social and financial performance (CSP – FP) has been a main objective in the literature on business management, as it would provide an economic justification for the social investment insofar as it contributes to the creation of value. This relationship has been empirically tested by several authors though without using a theoretical model that sustains this relationship. The aim of this article is to propose a theoretical model of the process of the creation of value from the (...) reputation generated by companies, integrating the factors that have been shown to be more relevant in this process from previous research, in such a way that hypotheses are put forward regarding the existence of this relationship and the factors that determine it. Finally, an empirical test is performed using the 100 most prestigious companies operating in Spain during 2004. (shrink)

The hypothetical conflict between self‐interest, corporate interest, and the common good is one of the hottest debated issues in business ethics. This article focuses on a particular corporate social responsibility approach within the field of sustainable (project) finance, which has the potential—given that certain reform measures are adopted—to overcome the alleged trade‐off between self‐interest and the common good. The approach is labeled as the Equator Principles (EPs) framework, which celebrated its tenth anniversary and the formal launch of the third generation (...) of the EPs (EP III) in 2013. The article shows how companies can theoretically be both profitable and socio‐environmentally responsible by adhering to the EPs. The article proceeds as follows: Before moving on to the EPs, section 2 defines the key terms self‐interest and common good. Section 3 then analyzes the EPs from a business ethics perspective. Section 4 shows how the EPs can help in solving the potential trade‐off between self‐interest and the common good—provided that the EPs are substantially revised. These required reform steps are discussed in section 5. The article ends with a summary of the main findings. (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)

For four decades, research on the role and responsibilities of business in society has centered on the business case for corporate social responsibility (CSR) and an increasing number of studies on the corporate social performance (CSP)—corporate financial performance (CFP) link emerged leading to controversial results. Heeding the call for a deeper understanding of the mechanisms linking certain CSR efforts to certain performance outcomes, this study provides a stakeholder-based organizing framework rooted in an extensive review of existing literature on the link (...) between CSP and CFP. In so doing, we aim at guiding research and practice toward less simplistic understandings of the CSP–CFP connection, thus advancing the debate over the consequences of voluntary integrating CSR into business operations and into relationships with stakeholders. By disentangling specific drivers and outcomes of the CSP–CFP link, we underline the importance of setting clear boundaries and specifying levels of analysis to generate comparable results. (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)

Companies increasingly recognize the importance of communicating corporate social responsibility including their engagement toward employees, the community, the environment and other stakeholder groups to attract applicants. The positive findings on the effect of CSR on applicants’ reactions are commonly based on the assumption that companies send a clear signal about their commitment to CSR. However, communication is always contextualized and has become more ambiguous through the increased availability of information online. External stakeholders including actual and potential applicants are confronted with (...) inconsistencies between the way companies communicate CSR activities and their overall CSR performance. Drawing on signaling theory, this article raises the question of how the interaction between strong CSR communication and low CSR performance influences organizational attractiveness. We propose that low CSR performance dampens the effect of CSR communication on organizational attractiveness. Hence, the inconsistency between CSR communication and CSR performance decreases organizational attractiveness. To test our hypotheses, we scraped 67,189 posts published on corporate Facebook career pages by 58 Fortune 500 companies from the time they began their respective career page until June 2018. Surprisingly, our results show that a low CSR performance strengthens the effect of CSR communication on organizational attractiveness. Thus, inconsistencies between CSR communication and CSR performance seem to lead to positive evaluations among applicants. (shrink)

We attempt to provide a novel antecedent of corporate social responsibility (CSR) by focusing on the role of CSR awards. Specifically, we investigate how competitors’ winning CSR awards incentivize non-winning firms’ CSR as a competitive catch-up. Using a difference-in-differences research design, we find that non-winners improve their CSR after their competitors have won CSR awards. Furthermore, based on the awareness-motivation-capability (AMC) framework from the competitive dynamics literature, we find that the media visibility of award winners, the performance gap of non-winners (...) with award winners, and the prior CSR of non-winners strengthen the CSR competitive catch-up behaviors. Findings from this study contribute to the CSR research by highlighting the spillover effect of CSR awards as a meaningful event in incentivizing non-winning firms’ CSR and extending the AMC framework to explain the contingency factors of competitive catch-up in the context of CSR research. (shrink)

This theoretical paper takes an agency-theoretic approach to questions of corporate social responsibility (CSR). A comparison of various extant frameworks focusses on how CSR agency emerges in complex multi-agent and multi-sector stakeholder networks. The discussion considers the respective capabilities and relevance of these frameworks – culminating in an integrative CSR practice model. A short literature review of the evolution of CSR since the 1950’s provides the backdrop for understanding multi-agent cross-sectoral stakeholder coalitions as a strategic determinant of today’s organizational behavior. (...) The paper turns to Werhane’s coupling of moral imagination and systems thinking and forging stakeholder coalitions in problem contexts that were traditionally deemed intractable by for-profit organizations. However, it identifies the problem that the systems approach treats macro-agents (organizations, stakeholders) as given (“black-boxed”) and shies away from more radically re-imagining the possibilities of reassembling agency from the bottom up. Actor Network Theory (ANT) provides such a method, which strictly commits to treating organizational behavior as a product of technological, human and environmental micro-processes. ANT, however, is lacking a genuine moral deliberative stance in designing complex CSR coalitions. In an attempt to capitalize on the respective strengths of these frameworks (Systems thinking and ANT) the paper tends to a recent iterative series of “situational transactive” models that are rooted in the US pragmatist tradition and seek to capture intelligent planning processes in complex problematic contexts. The contribution proposes a new CSR practice model, which assigns specific roles to the theoretical contributions of ANT, system thinking and pragmatism in complex deliberation processes. This model can be industry-tested in a future study. (shrink)

China’s historical mixed-ownership reform (the Reform) has prioritized enhancing the efficiency and financial performance of its large state-owned enterprises (SOEs) through introduction of partial private-sector equity ownership. However, the presence of a significant gap between China’s private enterprises’ corporate social responsibility (CSR) practices and those of its SOEs suggests potential for Reform-related ownership changes to negatively impact economy-wide CSR performance. We therefore examine the Reform’s impact on private acquirer firms’ CSR practices. We use a proprietary data set of firms listed (...) on the Shanghai and Shenzhen Stock Exchanges, covering the 2011–2015 period. Our findings identify that private firms can enhance their economic and political status through acquiring equity in state-controlled or SOEs and, following this, improve their CSR practices. Our findings have policy implications in the context of the world’s largest emerging market and, more generally, for SOE ownership reform in emerging and transition economies. (shrink)

There is a considerable scholarly discussion regarding how Islamic values influence CSR, but prior studies remain fragmented and scattered across several fields. This paper, therefore, aims to offer a more comprehensive understanding of the impacts of Islamic values on CSR by conducting a systematic literature review of 84 relevant publications from 1995 through 2020. The results of a thematic analysis show that there are four underlying themes to consider when explaining the influence of Islamic values on CSR: (1) Islamic narratives (...) promoting CSR, (2) Islam-based CSR, (3) Islamic financial institutions as enablers of CSR, and (4) stakeholders’ perspectives on how Islamic values influence CSR. This study contributes to the CSR literature by providing a systematic understanding of how Islamic values influence CSR and by identifying current challenges and promising directions for future exploration along this line of inquiry. (shrink)

When companies engage in corporate philanthropy, they can donate to a number of causes supporting a variety of issues, thus establishing cause portfolios. This research examines how the focus of a cause portfolio affects company evaluations. Results from an experiment show that when a company donates a small amount of money, consumers have lower evaluations of a company when the cause portfolio is focused (i.e., supports one issue) versus diverse (i.e., supports many issues). This is because the focused (vs. diverse) (...) portfolio is perceived to have a weaker impact to society. We provide additional evidence of this effect using a data set of Fortune 500 companies’ foundations, showing that cause portfolios are more likely to result in lower stakeholder evaluations when focused (vs. diverse). Again, we find that donation amount alleviates the difference between focused and diverse portfolios. The findings hold important implications for the company’s management of cause portfolios. (shrink)

Adopting an instrumental approach for stakeholder management, we focus on two primary stakeholder groups to investigate the relationship between employee treatment and loan contracts with banks. We find strong evidence that fair employee treatment reduces loan price and limits the use of financial covenants. In addition, we document that relationship bank lenders price both the levels and changes in the quality of employee treatment, whereas first-time bank lenders only care about the levels of fair employee treatment. Taking a contingency perspective, (...) we find that industry competition and firm asset intangibility moderate the relationship between good human resource management and bank loan costs. The cost reduction effect of fair employee treatment is stronger for firms operating in a more competitive industry and having higher levels of intangible assets. (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)

This article outlines the results of an inquiry into the nature of entrepreneurial commitment to social responsibility as a business philosophy. Findings show that the respondents, as a group, reported a strong orientation to this view. Several social responsibility topics emerge in a position of special prominence to entrepreneurs, and their preferences for these topics do not widely vary. Furthermore, the degree of attachment to social responsibility, as an operational construct, correlates with several demographic and psychographic dimensions.