The link between independent directors and firm’s performance: the moderating role of corporate social responsibility

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hien Thi Tran
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Fixed Effects ◽  
Resource Dependence ◽  
Estimation Method ◽  
Resource Dependence Theory ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Corporate Social

Purpose This paper aims to examine how independent directors (IDs) affect a firm’s performance measured on profitability, with corporate social responsibility (CSR) interaction. Design/methodology/approach The study uses an international data set of 1,817 firm-year observations from 545 large companies in 20 countries across Asia, America and Europe, and the fixed-effects estimation method. Findings The direct effect of IDs alone on profitability is statistically insignificant; however, the synergic effect of IDs and CSR on profitability becomes significantly positive when firms disclose CSR information. Practical implications The profitability is partially sourced from the synergy of IDs and stakeholders through CSR. IDs may use CSR disclosure to win stakeholders’ goodwill. This goodwill will likely be transformed into profitability. The empirical results indicate that there should be more need for IDs’ engagement in CSR projects as the resources of IDs combined with external stakeholders can be of important value to firms. Originality/value This paper reveals the underlying mechanism that firm-idiosyncratic value is formed using a combination of ID resources and stakeholders through CSR. This research extends the literature of IDs’ efficiency and effectiveness and confirms the agency theory and resource dependence theory.

Mind the gap: independent directors and corporate social responsibility in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ruijie Jin ◽  
Xiaoxian Jiang ◽  
Ao Shen
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Fixed Effects ◽  
Independent Directors ◽  
Theoretical Understanding ◽  
Content Type ◽  
Listed Firms ◽  
Fixed Effects Regression ◽  
Corporate Social

Purpose This study aims to examine the effect of independent directors on the corporate social responsibility (CSR) gap – a misalignment between internal and external CSR. More specifically, the authors investigate how two types of independent directors (i.e. politically connected and foreign) affect a firm’s CSR gap in China. Design/methodology/approach The authors use the fixed-effects regression model to analyze the panel dataset, which is conducted by a sample of Chinese publicly listed firms from 2008 to 2015. Findings The findings indicate that, on average, firms undertake more external than internal CSR actions. Importantly, the authors find that firms having politically connected independent directors on boards have a wider gap between their internal and external CSR. In contrast, firms having foreign independent directors on boards have a narrower gap between their internal and external CSR. Practical implications This study provides insights into the role of independent directors in increasing or decreasing the gap between a firm’s internal and external CSR actions, which offers important implications for policymakers and investors. Originality/value This study extends the literature on the causes of the CSR gap and deepens the theoretical understanding of the governance role of independent directors in China.

The impact of ownership structure on corporate tax avoidance with corporate social responsibility as mediating variable

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anissa Dakhli
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Corporate Tax ◽  
Data Set ◽  
Content Type ◽  
Corporate Social ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the direct and indirect relationship between institutional ownership and corporate tax avoidance using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach This study uses panel data set of 200 French firms listed during the 2007–2018 period. The direct and indirect effects between managerial ownership and tax avoidance were tested by using structural equation model analysis. Findings The results indicate that institutional ownership negatively affects tax avoidance. The greater the proportion of the institutional ownership, the lower the likelihood of tax avoidance usage. From the result of the Sobel test, this study indicated that CSR partially mediates the effect of institutional ownership on corporate tax avoidance. Practical implications The findings have some policy and practical implications that may help regulators in improving the quality of transactions and in achieving more efficient market supervision. They recommend to the government to add regulations and restrictions to the structure of corporate ownership to control corporate tax avoidance in French companies. Originality/value This study extends the existing literature by examining both the direct and indirect effect of institutional ownership on corporate tax avoidance in French companies by including CSR as a mediating variable.

Corporate governance and corporate social responsibility interface: a case study of private equity

2020 ◽  
Vol 20 (4) ◽  
pp. 703-717 ◽  
Author(s):  
Virgo Süsi ◽  
Krista Jaakson
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Private Equity ◽  
Resource Dependence Theory ◽  
Medium Size ◽  
Content Type ◽  
Corporate Social

Purpose This paper aims to explore why private equity (PE) cares about corporate social responsibility (CSR) of its investees given their relatively short investment time-horizon and how it designs corporate governance (CG) bundle to achieve both financial and CSR goals of the private firms it invests in. Design/methodology/approach Case study design is applied to get deeper insights on the why and how questions posed. Analysis is based on triangulation of secondary data and in-depth interviews with both PE and their investee firms. Findings The authors find that long-term sustainability supported by CSR increases firm value. They also outline specific CG bundle that the PE uses to achieve both its financial and CSR goals. CG mechanisms appeared to reflect agency theory, but even more resource dependence theory. Practical implications The outlined CG bundle could be used as a template for all types of private firm owners to improve both financial and CSR performance of the firm. Originality/value The paper adds to fragmented area of CG and CSR interface. The authors specifically focus on several under-researched contexts of this interface: private small and medium size firms (SMEs), emerging markets and PE investors.

Financial-tax reporting conformity, tax avoidance and corporate social responsibility

2020 ◽  
Vol 18 (3) ◽  
pp. 639-659
Author(s):  
Abdullah Alsaadi
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Negative Consequences ◽  
Data Set ◽  
Content Type ◽  
Aggressive Tax Avoidance ◽  
Tax Reporting ◽  
Corporate Social ◽  
The Impact

Purpose This study aims to investigate the effect of financial-tax reporting conformity jurisdictions on the association between corporate social responsibility (CSR) and aggressive tax avoidance. Design/methodology/approach Using a sample comprising firms domiciled in Europe for the period 2008–2016, this study uses regression analysis to test the impact of financial-tax reporting conformity jurisdictions on the association between CSR and aggressive tax avoidance. Findings The empirical results show that there is a positive association between CSR and tax avoidance, and firms headquartered in low financial-tax reporting conformity jurisdictions are more likely to engage in CSR to hedge against the potential negative consequences of aggressive tax-avoidance practices as compared to firms domiciled in countries with high level of financial-tax reporting conformity. Practical implications This study confirms Sikka’s (2010, 2013) view of “organised hypocrisy” act committed by firms to cover their socially irresponsible activities of aggressive tax avoidance by engaging in CSR. Results have implication for various regulatory bodies and investors in that the type of financial-tax conformity does impact the link between CSR and tax avoidance, and based on that, CSR firms may engage in CSR to overcome any negative reactions that could be caused as a result of tax avoidance. Originality/value To the best of the author’s knowledge, this study is the first to investigate the impact of financial-tax reporting conformity jurisdictions on the association between CSR and aggressive tax avoidance. This study also contributes to the literature in that, it uses an alternative data set which offers a more objective assessment of CSR measure and covers multiple countries.

Bridging the gap between corporate social responsibility performance and tax aggressiveness

2020 ◽  
Vol 33 (4) ◽  
pp. 825-855 ◽  
Author(s):  
Eduardo Ortas ◽  
Isabel Gallego-Álvarez
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Cultural Dimensions ◽  
Economic Sectors ◽  
Data Set ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Corporate Social

PurposeThis paper addresses the role of corporate social responsibility (CSR) performance as a potential mechanism for reducing firms' likelihood of engaging in tax aggressiveness (TAG). The paper also contributes to the existing literature by addressing the moderating effect of national cultures on the link between CSR performance and corporate TAG.Design/methodology/approachThe focus is placed on an unbalanced panel of 2,696 companies distributed in 30 countries and seven economic sectors over the period of 2002–2014.FindingsThe results provide support for those companies achieving high corporate social performance (CSP), corporate environmental performance (CEP) and corporate governance performance (CGP) being less likely to engage in aggressive tax practices. Finally, the results identify some national cultural dimensions moderating the link between disaggregated measures of CSR performance and firms' TAG.Research limitations/implicationsThe difficulty of accessing CSR and TAG data for non-listed companies could bias the data set towards a compliant company profile because of the higher visibility. In addition, the use of effective tax rates to examine firms' TAG should be interpreted with some caution.Practical implicationsThe paper's findings provide unique and useful information for company stakeholders and managers aiming to address the factors that enhance firms' incentives to engage in aggressive tax practices.Originality/valueThis paper addresses the multidimensional nature of CSR performance by analysing the links between CSP, CEP and CGP and corporations' TAG. Furthermore, the research addresses the way in which national culture moderates the links between disaggregated measures of CSR performance and corporate TAG.

scholarly journals Corporate social responsibility and Latin American firm performance

2017 ◽  
Vol 17 (3) ◽  
pp. 403-445 ◽  
Author(s):  
Chiara Amini ◽  
Silvia Dal Bianco
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Performance ◽  
Social Responsibility ◽  
Latin American ◽  
Data Set ◽  
Content Type ◽  
Business Operations ◽  
Corporate Social ◽  
The Impact ◽  
Matching Techniques

Purpose The purpose of this paper is to analyse the impact of corporate social responsibility (CSR) on firm performance in six Latin American economies. Firm performance includes five distinct dimensions, namely, firm turnover, labour productivity, innovativeness, product differentiation and technological transfer. The countries under scrutiny are Argentina, Bolivia, Chile, Colombia, Ecuador and Mexico. Design/methodology/approach Propensity score matching techniques are used to identify the causal effect of CSR on firm performance. To this end, World Bank Enterprise Survey (2006 wave) is used. This data set collects relevant firm-level data. Findings CSR has a positive impact on the outcome variables analysed, suggesting that corporate goals are compatible with conscious business operations. The results also vary across countries. Research limitations/implications The pattern that emerges from the analysis seems to suggest that the positive effects of CSR depend on countries’ stage of industrialisation. In particular, the least developed the economy, the wider the scope of CSR. Nonetheless, the relationship between conscious business operations, firm performance and countries’ level of development is not directly tested in the present work. Practical implications The main practical implication of the study is that Latin American firms should adopt CSR. This is because corporate responsible practices either improve firm performance or they are not shown to have a detrimental effect. Social implications The major policy implication is that emerging countries’ governments as well as international organisation should provide meaningful incentives towards CSR adoption. Originality/value The paper provides three major original contributions. First, it brings new descriptive evidence on CSR practices in Latin America. Second, it uses a broader and novel definition of firm performance, which is aimed at capturing developing countries’ business dynamics as well as at overcoming data limitations. Finally, it reassesses and extends the empirical evidence on the impact of CSR on firm performance.

Beyond corporate social responsibility. Towards a model for managing sustainable mining operations. Qualitative research based upon best practices

2015 ◽  
Vol 11 (3) ◽  
pp. 605-621 ◽  
Author(s):  
Jose Ventura ◽  
Cesar Sandro Saenz
Keyword(s):  
Corporate Social Responsibility ◽  
Best Practices ◽  
Social Responsibility ◽  
Environmental Sustainability ◽  
Three Dimensions ◽  
Mining Operations ◽  
Data Set ◽  
Content Type ◽  
Mining Companies ◽  
Corporate Social

Purpose – The aim of the study is to propose a model for conducting socially responsible operations in the mining industry, thriving to reach and sustain world-class standards in regard to profitability and environmental sustainability. The model uses a framework built upon a set of best practices in social responsibility by some of the largest mining companies in Peru. Design/methodology/approach – The methodology adopted emphasizes the scrutiny of best practices among 92 initiatives undertaken by 10 companies – 5 large and 5 mid-sized companies as measured by the ratio “amount of investment” – which contributed most to prevent social conflict escalation. Data set received input from in-depth interviews to managers in charge of social affairs as well as from interviews to social constituents – beneficiaries and local authorities. Content analysis supported data processing and analysis of results. Findings – Main findings comprise the following: distinct schemes for managing social responsibility in dependence upon impact evaluation indicators were found, which help to organize three models for conducting mining operations: traditional mining, up-to-date mining, and sustainability-oriented mining; evidence of distinct pathways undergone by large- and mid-sized companies in their quest to up-scale their corporate social responsibility profile. Originality/value – Overall results from this study suggest the feasibility to modeling the social responsibility of mining companies in accordance to three dimensions – social, economic, and environmental – that draw from the analysis of best practices undertaken by large- and mid-sized companies.

The negative synergistic effect of internationalization and corporate social responsibility on US restaurant firms’ value performance

2016 ◽  
Vol 28 (8) ◽  
pp. 1759-1777 ◽  
Author(s):  
SoYeon Jung ◽  
Seoki Lee ◽  
Michael Dalbor
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Synergistic Effect ◽  
Fixed Effects ◽  
International Markets ◽  
Investment Strategies ◽  
Fixed Effects Model ◽  
Content Type ◽  
Csr Strategies ◽  
Corporate Social

Purpose The purpose of the current study is to investigate the possible existence of a synergistic effect of internationalization and corporate social responsibility (CSR) on a firm’s value performance. Design/methodology/approach To empirically test the argument, this study analyzed data from 40 US-based publicly traded restaurant companies (251 observations) from 2000 to 2011 by performing a two-way fixed-effects model. Findings This study’s findings support the hypothesis that when implemented simultaneously, internationalization and CSR have a negative synergistic impact on a restaurant firm’s value performance. Practical implications Restaurant managers might need to inquire thoroughly into the timing and content of CSR investment strategies while entering into new international markets. Restaurant executives may additionally need to focus more on effective risk management than other issues (e.g. growth or reputation) when developing both internationalization and CSR strategies simultaneously. Originality/value By suggesting and demonstrating a negative synergistic effect of internationalization and CSR on a firm’s value, this study presents new and unique insights into previous research regarding the combined effect of the two strategies.

Nexus between oil price uncertainty and corporate social responsibility: evidence from US firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Guenichi Hassen ◽  
Khalfaoui Hamdi
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Fixed Effects ◽  
Price Volatility ◽  
Oil Price ◽  
Green Economy ◽  
Price Uncertainty ◽  
Content Type ◽  
Negative Effect ◽  
Corporate Social

PurposeThis paper examines the effect of oil price uncertainty on corporate social responsibility (CSR) for 507 US firms over the period 1985–2019.Design/methodology/approachTo investigate the nexus between oil price uncertainty and CSR, we have proceeded with a fixed-effects panel regression model over the period 1985–2019.FindingsUsing a dataset of 507 US firms, different specifications of CSR and two alternatives measures of oil price uncertainty, we show that oil price uncertainty negatively influences the CSR in the global US panel and firm's characterized panel. This negative effect is dependent on firms' size, firm's age and value of book share of firms.Research limitations/implicationsUS firms are exposed to more risk when carrying high levels of debt, resulting in reduced spending to improve social and environmental conditions. While the negative effect of oil price uncertainty on CSR is exacerbated in economic crisis periods.Practical implicationsUS firms are influenced by energy price volatility especially by oil price fluctuations which are the main factor of American economic growth. The rise of oil price uncertainty reduces sustainable corporate development and investment in the green economy.Social implicationsRethinking renewable energies as an alternative solution in order to guarantee the performance and sustainability of social, environmental and cultural activities.Originality/valueYoung and small firms, lower-share outstanding firms and high book value per share firms are the most negatively affected by oil price uncertainty and therefore their social responsibilities are reduced. However, by introducing interaction variables in the main model, we find that the most indebted firms on one hand and big firms and high-number shares outstanding firms, on the other hand, are the most influenced by oil price uncertainty which consequently limits their social and environmental responsibility.

Corporate social responsibility and sustainability education: A trans-Atlantic comparison

2011 ◽  
Vol 17 (5) ◽  
pp. 583-603 ◽  
Author(s):  
Jeremy Moon ◽  
Marc Orlitzky
Keyword(s):  
Corporate Social Responsibility ◽  
North America ◽  
Social Responsibility ◽  
Resource Dependence ◽  
Business Schools ◽  
Religious Affiliation ◽  
Resource Dependence Theory ◽  
Educational Institutions ◽  
Theoretical Perspectives ◽  
Corporate Social

AbstractUsing a sample of 72 European and 22 North American educational institutions, we examine the extent to which business schools in North America and Europe are driving educational programs and initiatives in corporate social responsibility and sustainability (CSRS). Drawing on several theoretical perspectives, such as institutional-comparative perspectives and resource dependence theory, the study indicates the increasing prominence of CSRS education in business schools on both continents. It does so through analysis of the extent to which business schools offer (a) dedicated CSRS programs, (b) CSRS tracks and majors, (c) compulsory CSRS classes or modules, and (d) optional CSRS modules across the range of taught programs. Contrary to some previous findings, religious affiliation, public/private status, and program size had only a negligible direct association with schools' commitment to CSRS education. However, business school prestige showed a statistically significant relationship. Finally, the study highlights how European respondents' perceptions concerning the primary drivers and constraints of CSRS initiatives differed from those in North America.

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