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)

This study examines the influence of three components of corporate social responsibility on team performance. In the proposed model of this study, team performance is indirectly affected by three dimensions of perceived corporate citizenship (i.e., economic, legal, and ethical citizenship) via the mediation of team efficacy and team self-esteem. Surveying members of 172 teams confirms most of our hypothesized effects. Our results show that economic citizenship influences team performance via the mediation of both team efficacy and team self-esteem. However, legal (...) citizenship influences team performance via team efficacy alone, whereas ethical citizenship influences team performance only via team self-esteem. We discuss the theoretical and managerial implications of our findings. (shrink)

This article introduces a theoretical framework that combines institutional and stakeholder theories to explain how firms choose their corporate social responsibility (CSR) strategy. Organizational researchers have identified several distinct CSR strategies (e.g., obstructionist, defensive, accommodative, and proactive), but did not explain the sources of divergence. This article argues that the divergence comes from the variability in the configuration of external influences that consists of institutional and stakeholder pressures. While institutions affect firms’ social behavior by shaping the macro-level incentive structure and (...) sources of legitimacy (distal mechanisms), firms’ stakeholders can amplify or buffer the institutional forces by acting as mediators (proximate mechanisms). The two dimensions are interdependent in that stakeholders draw legitimacy and power from institutions, and institutions are often actualized through stakeholder mechanisms. Together, they form a particular configuration of external influences that shapes how focal firms construct their CSR strategy. (shrink)

This study proposes a research model based on attachment theory, which examines the role of corporate citizenship in the formation of organizational trust and work engagement. In the model, work engagement is directly influenced by four dimensions of perceived corporate citizenship, including economic, legal, ethical, and discretionary citizenship, while work engagement is also indirectly affected by perceived corporate citizenship through the mediation of organizational trust. Empirical testing using a survey of personnel from 12 large firms confirms most of our hypothesized (...) effects. Finally, theoretical and managerial implications of our findings are discussed. (shrink)

Joining voluntary thematic initiatives can be a means for firms to legitimate their business activities. However, a lack of review mechanisms could create incentives for free-riding. This might lead to a lower commitment to the initiative’s principles, and endanger its credibility and its members’ legitimacy benefits. Whether members of voluntary initiatives take advantage of the opportunity to free-ride has not been analyzed empirically so far. To fill this research gap, we investigate from an institutional theory perspective the actual implementation behavior (...) of publicly listed signatories of the United Nations Principles for Responsible Investment (UN PRI) in a difference-in-differences and an event study setting. Our empirical results show that, after signing, UN PRI signatories integrate environmental, social, and governance (ESG) criteria in their business activities significantly more than matched non-signatories from the financial sector, indicating the commitment of the signatories to the UN PRI in general. However, while the initial members show a high commitment to the initiative’s principles by increasing their ESG integration performance substantially, new members signing at a later stage of the initiative perform considerably less, and thus undermine the UN PRI’s credibility. We derive implications for voluntary thematic initiatives to avoid such a development. (shrink)

What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility practices? We argue that in emerging economies, firms that adopt CSR practices positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm’s financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices (...) and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institution-based view can jointly contribute to the CSR literature. (shrink)

For many firms, a focus on corporate social responsibility (CSR) is an indication to stakeholders that the firm is concerned about social and environmental issues. However, these same firms may engage in CSR activities with the expectation that these activities will increase their bottom line. A relevant, and highly researched question, is the relationship between CSR and performance. The findings are inconclusive, indicating a need to consider other explanations. Several authors have drawn on the resource-based view of the firm to (...) suggest that CSR can give a firm a competitive advantage. In this article we draw on and further develop this research, by focusing on four outcomes of CSR initiatives: strategic disadvantage, strategic necessity, temporary strategic advantage, and strategic advantage. We exemplify this with two cases. The article contributes to the literature by developing a set of possible outcomes, by recognizing several issues which result in strategic necessity, and by suggesting movement between the outcomes. (shrink)

This study assessed whether and how government–business partnerships offer a unique platform that targets profound environmental impacts via the promotion of radical eco-innovation. It applied transactional cost and complementary logics to explain the rationale of GBP formation for radical eco-innovation, and further assessed the operation of GBPs from governance, learning, and rulemaking aspects. This study applied propensity score matching technique to empirically test these theoretical associations using 225 observations representing 166 U.S. firms’ participation in 192 environmental alliances between 1985 and (...) 2013. The study results confirmed GBPs’ role in channeling public and private efforts in pursuing transformative environmental change via the adoption of radical eco-innovation goals. Results highlight four critical elements of GBP operation—effective governance, exploration learning, cognitive learning, and rulemaking—that enable participants to embrace these radical environmental solutions. (shrink)

Setting up affiliated companies in tax havens is a legitimate, but ethically dubious, business practice. This study examines the conditions under which emerging business groups tend to use such a business practice. Business groups in emerging economies have been operating in weak institutional environments with substantial government intervention and ineffective market-supporting institutions. Having offshore companies in tax havens enables the groups to bypass some market transaction costs and institutional constraints, and it also provides them the opportunity to evade taxes and (...) hide illegal conduct, such as bribery. Empirical evidence based on a sample of Taiwanese business groups showed that business groups with a higher level of prosocial orientation established fewer offshore companies in tax havens, as manifested by their commitment of resources to establishing nonprofit organizations. In contrast, groups that have higher levels of product and international diversification tend to use this ethically dubious business practice. However, highly internationalized groups are less likely to do so when they have committed substantial resources to prosocial activities. (shrink)