Despite ample research on corporate governance (CG) and corporate social responsibility (CSR), there is a lack of consensus on the nature of the relationship between these two concepts and on how this relationship manifests across institutional contexts. Drawing on the national business systems approach, this article systematically reviews 218 research articles published over a 27-year period to map how CG–CSR research has evolved and progressed theoretically and methodologically across different institutional contexts. To shed light on the full gamut of the (...) CG–CSR relationship, we categorize and explore the nature of this relationship along two strands: (a) CSR as a function of CG and (b) CG as a function of CSR. Through this review, we identify key themes where CG–CSR research has lagged and account for under-explored contexts in this domain. Finally, we put forth a comprehensive agenda for progressing future research in the field. (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)

Although the history of adopting the Western Corporate Social Responsibility (CSR) concept in China spans less than 20 years, the core principles of CSR are not new and can be legitimately interpreted within traditional Chinese culture. We find that the Western CSR concepts do not adapt well to the Chinese market, because they have rarely defined the primary reason for CSR well, and the etic approach to CSR concepts does not take the Chinese reality and culture into consideration. This article (...) resolves these problems and contributes a new definition of CSR, called here – the Harmony Approach to CSR. Simply, the Chinese harmony approach to CSR means 'respecting nature and loving people'. It is the first time CSR has been defined in relation to Confucian interpersonal harmony and Taoist harmony between man and nature. Conceptually, this definition will broaden our understanding and will fit the characteristics of the Chinese market better. The idea of incorporating cultural contexts into CSR concepts could also contribute to future CSR studies. In business practice, it will help corporations to adopt CSR on their own initiative. The proposed virtues of traditional Chinese wisdom, in particular, will guide corporations to a new way of improving their CSR performance. (shrink)

While the effect of culture on finance and management has been well documented in the literature, it is unclear whether and by which channel(s) ethnic diversity affects corporate social responsibility (CSR). Integrating social identity theory and neo-institutional theory, we investigate the ethnic diversity–CSR relation and explore potential mechanisms and boundary conditions. Based on the distribution of ethnic groups across different regions in China, We find that ethnic diversity negatively affects firms’ CSR performance. We document that social trust mediates the negative (...) ethnic diversity–CSR relationship, and linguistic diversity strengthens and marketization mitigates this relation. The results are robust for potential endogeneity and alternative measures of ethnic diversity and CSR performance. Our study highlights the impact of ethnic diversity on corporate behaviors, and provides practical and ethical implications on CSR promotion. (shrink)

The current study investigates whether tournament incentives motivate chief executive officer to be socially responsible. Furthermore, it explores the role of sub-national institutional contingencies [i.e., state-owned enterprises vs. non-SOEs, foreign-owned entities vs. non-FOEs, cross-listed vs. non-cross-listed, developed region] in CEO tournament incentives and the corporate social responsibility performance relationship. Data were collected from all A-shared companies listed in the stock exchanges of China from 2014 to 2019. The study uses the baseline methodology of ordinary least squares and cluster OLS regression. (...) Moreover, firm-fixed effects regression, two-stage least squares regression, and propensity score matching deal with the endogeneity problem and check the robustness of the results. The results provide reliable evidence that tournament incentives motivate CEOs to be more socially responsible. On the other hand, sub-national institutional contingencies positively affect the association between CEO tournament incentives and CSRP. The findings have important implications for companies and regulators who wish to enhance CSP by providing incentives to top managers. (shrink)

Ecological psychology regards culture as a response to the demands of the environment. As rice farming in history has significantly influenced the formation of human cultural consciousness, we investigate how the rice culture of a chairperson’s birthplace affects a firm’s CSR activities. Our main finding reveals a positive and significant correlation between a chairperson’s rice culture and CSR activities. Further analysis demonstrates that this positive relationship is particularly pronounced in private firms and family firms. We also examine the incremental effect (...) of individual management heterogeneity and find that the positive relationship is strengthened when the chairperson has a shorter tenure or higher level of education. Additionally, more developed regions help enhance this positive relationship. To address the endogeneity concerns, we adopt an instrumental variable approach and exogenous event analysis based on chairperson turnover. The results are robust to a set of additional tests. Overall, our findings document the benefits of a chairperson’s rice culture in developing countries like China and reveal how this benefit is priced into CSR performance. (shrink)

This paper contributes to biodiversity and species extinction literature by examining the relationship between corporate accountability in terms of species protection and factors affecting such accountability from forward-thinking companies. We use triangulation of theories, namely deep ecology, legitimacy, and we introduce a new perspective to the stakeholder theory that considers species as a ‘stakeholder’. Using Poisson pseudo-maximum likelihood regression, we examine a sample of 200 Fortune Global companies over 3 years. Our results indicate significant positive relations between ecologically conscious companies (...) that are accountable for the protection of biodiversity and species extinction and external assurance, environmental performance, partnerships with socially responsible organizations and awards for sustainable activities. Our empirical results appear to be robust in controlling for possible endogeneities. Our findings contribute to the discussion on the concern of species loss and habitat destruction in the context of corporate accountability, especially in responding to the sixth mass extinction event and COVID-19 crisis. Our results can also guide the policymakers and stakeholders of the financial market in better decision making. (shrink)

In countries such as China, where Confucianism is the backbone of national culture, high-social-status entrepreneurs are inclined to engage in corporate social responsibility activities due to the perceived high stress from stakeholders and high ability of doing CSR. Based on a large-scale survey of private enterprises in China, our paper finds that Chinese entrepreneurs at private firms who have high social status are prone to engage in social responsibility efforts. In addition, high-social-status Chinese entrepreneurs are even more likely to engage (...) in social responsibility efforts as they become more politically connected and as the region becomes more market-oriented. These findings extend the upper echelons perspective of CSR into Chinese context by shedding light on antecedents of CSR from a new perspective and clarifying the boundary conditions of the social status–CSR link from the institutional perspective. (shrink)

While business ethics has generated a great deal of research internationally over the last few decades, academic reviews of the business ethics literature remain limited. Moreover, there has been little attempt to date to analyze this literature specifically in the Greater China region, which has been experiencing rapid socioeconomic growth and dynamic evolution of business ethics in recent decades. This paper addresses this research gap by undertaking a comprehensive and critical appraisal of the business ethics literature on Greater China. In (...) particular, it maps out the existing research findings, identifies limitations in methodology, and suggests future directions for business ethics research in this region. The findings indicate that the scholarly interests cover 24 research themes, including corporate social responsibility and social performance; ethical beliefs, judgment, values, decision-making, and culture; workplace ethics and behavior; marketing ethics and consumer behavior; and sustainability. This review reveals a growing imbalance between empirical and conceptual/theoretical studies on business ethics. In addition, the published works covered in this review heavily rely on survey method and convenience sampling, with a predominant focus on a single individual level of analysis. Importantly, this study identifies four directions for future research: contextualized theoretical development, addressing multilevel research, developing research design tailored to the Chinese context, and ensuring more diversified and rigorous data collection. (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)

The executives of listed firms play an important role in the fulfillment of corporate social responsibility. Based on behavioral consistency theory, this study examines the association of CSR performance among multiple firms for the same executive served at different times. By tracking the movement of executives across Chinese listed firms over the period 2010–2019, we find that there is a significantly positive association between the predecessor and the successor firm’s CSR performance for the same executive, implying that an individual’s value (...) and preference for CSR maintain consistency within a certain period of time. We also find that a longer employment gap and lower internal control effectiveness will damage the association of CSR performance between the predecessor and the successor firm. Our results are robust to testing in subsamples and controlling the endogeneity problems. Our conclusion provides a new perspective to understand the influence mechanism of CSR performance in the context of inter-firm executive mobility and provides empirical evidence for listed firms to improve their decision-making in hiring and evaluating executives. (shrink)

This paper investigates the association between board characteristics and the company’s corporate social responsibility assurance decision in China. By examining 2054 firm-years of Chinese listed companies with CSR reports from 2008 to 2012, we find that firms with a large board size, more female directors, and separation of CEO and chairman positions are more likely to engage in CSR assurance. Gender diversity also influences the CSR assurance provider choice. However, board independence and overseas background of the CEO do not affect (...) the CSR assurance decision. Inconsistent with our prediction, firms with foreign directors are less likely to engage in voluntary CSR assurance. In summary, this research provides in-depth insights into the determinants of Chinese firms’ voluntary CSR assurance. (shrink)

It is now possible to propagate CSR information through social media platforms. Electronic word of mouth directly impacts image and upcoming portfolios of the organization. Customers, employees, and other stakeholders generate revenue for the company. Our goal was to understand why people were sharing and commenting in response to terrible reports about corporate social responsibility on WeChat. A company’s desire to comment on and share CSR news and its perception of its own social and environmental responsibility were all presumed explanatory (...) variables in our investigation. 315 WeChat users were asked to grade a fictitious news report of the environment. The results were shocking. According to our findings, an individual’s attitude toward actions and the effectiveness of information directly correlates to their social and environmental awareness level. EWOM may be discouraged by a company’s brand name, which has the potential to harm its reputation with its customers. (shrink)

In this study, we examine the influence of senior leadership on firms’ corporate social responsibility. We integrate upper echelons research that has investigated either the influence of the CEO or the top management team on CSR. We contend that functional experience complementarity between CEOs and TMTs in formulating and implementing CSR strategy may underlie differentiated strategies in CSR. We find that when CEOs who have predominant experience in output functions are complemented by TMTs with a lower proportion of members who (...) have experience in output functions, there is a pronounced effect on the community, product, and diversity dimensions of CSR. In turn, when output-oriented CEOs are complemented by output-oriented TMTs, we observe an effect on the employee relations dimension of CSR. Interestingly, we find no influence of CEO-TMT complementarity on the environment dimension of CSR. In general, our empirical results support the relevance of the interaction between CEOs and their TMTs in defining their firms’ CSR profile. (shrink)

The current study looked at the impact of board of director characteristics on corporate social responsibility (CSR) in the Pakistani setting. The study further added to the body of knowledge by comparing the impact of board characteristics in family versus non-family businesses in an emerging market. The study’s sample consists of 139 non-financial Pakistan Stock Exchange (PSX) listed firms from 2008 to 2019. The level of CSR among sample firms was assessed using a multidimensional financial approach. The random-effect model was (...) employed to test the study’s hypotheses. The findings support the dysfunctional view of the role of the board of directors’ in family-owned businesses. Overall, board size and CEO duality have a significant negative impact on CSR, whereas board independence has a significant positive impact. While these findings applied to both family-owned and non-family-owned businesses. It was discovered that among family-owned businesses, boards tend to look after the interests of family members, and thus are less likely to support CSR. The findings of this study will assist regulatory authorities, investors, and financial analysts in understanding CSR practices in Pakistani firms, allowing them to review the role of the board of directors in CSR among family and non-family-owned firms. (shrink)

In this study, we examine the influence of senior leadership on firms’ corporate social responsibility. We integrate upper echelons research that has investigated either the influence of the CEO or the top management team on CSR. We contend that functional experience complementarity between CEOs and TMTs in formulating and implementing CSR strategy may underlie differentiated strategies in CSR. We find that when CEOs who have predominant experience in output functions are complemented by TMTs with a lower proportion of members who (...) have experience in output functions, there is a pronounced effect on the community, product, and diversity dimensions of CSR. In turn, when output-oriented CEOs are complemented by output-oriented TMTs, we observe an effect on the employee relations dimension of CSR. Interestingly, we find no influence of CEO-TMT complementarity on the environment dimension of CSR. In general, our empirical results support the relevance of the interaction between CEOs and their TMTs in defining their firms’ CSR profile. (shrink)

We provide the first comprehensive and robust evidence on the relationship between CSR disclosure quality and the costs of corporate bonds in China. We find that firms with high CSR disclosure quality are associated with lower costs of corporate bonds. Our findings are robust to endogeneity issues arising from reverse causality, omitted variable bias, and the interdependencies between price and non-price terms. The negative relationship between CSR disclosure quality and the costs of corporate bonds is stronger in weak corporate governance (...) firms and in firms located in regions with weak institutional environments. We also find that firms’ misconduct significantly mitigates the influence of CSR disclosure quality. In the additional analyses, we provide evidence that CSR disclosure can offer incremental information beyond the credit ratings. Regarding non-price terms, we conclude that firms with higher quality of CSR information are less likely to be subject to collateral terms, but they tend to include more restrictive covenants. Further analyses also show that compared with low-quality or mandatory CSR disclosure firms, bond investors perceive firms with CSR disclosures rated above “A” categories or voluntary CSR disclosure as less likely to cause asymmetric information problems and thus charge lower risk premiums. Overall, this study demonstrates that CSR disclosure quality is an important determinant that affects both price and non-price bond contract terms. (shrink)