scholarly journals Strategic corporate social responsibility with spillover effect in innovation

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yan Liu ◽  
Heng Xu
Keyword(s):  
Corporate Social Responsibility ◽  
Spillover Effect ◽  
Socially Responsible ◽  
Content Type ◽  
First Mover Advantage ◽  
Realistic Situation ◽  
Managerial Implications ◽  
Reduction Effect ◽  
Corporate Social ◽  
First Mover

Purpose This paper aims to investigate the motivation for firms to innovate their products to be socially responsible in the presence of the spillover effect. The follower of the innovation in corporate social responsibility (CSR) can benefit from the leader’s innovation by technological spillover. For instance, evidence can be found in the cosmetics industry (e.g. Lush Retail Ltd. and The Body Shop) and the market of hybrid electric vehicles (e.g. Toyota and Honda). Moreover, consumers may have different perceptions on the sequence of CSR innovation by firms, they may prefer more on the CSR product launched by the leader because they usually relate the desired stage to their interests when making a purchase decision. Therefore, the firms’ decision to be a leader of the CSR innovation depends on the trade-off between the loss in the spillover effect and the benefit of the first-mover advantage, which has not been considered by the existing literature. This paper explains the firms’ motivation on CSR innovation in a realistic situation where competing firms’ CSR programs are launched sequentially and sheds light on the private sector’s decision on strategy from the perspective on the social contribution, and provides some managerial implications about the competing firms’ strategies of launching the CSR innovation. Design/methodology/approach The authors construct a two-period Hotelling model in which consumers are divided into two groups: the altruistic and normal consumers. The altruistic consumers have more willingness to pay for the CSR product while the normal consumers only care about the product performance improved by the firms’ CSR activities. Firms have the option to innovate their basic products to be socially responsible and make their decision on such CSR innovation sequentially. Moreover, the follower of the innovation can receive a spillover effect from the leader, meaning that there may exist a second-mover advantage in terms of innovation (the authors define this as a spillover effect), but in the meanwhile, the altruistic consumers value more on the CSR product sold by the leader than that by the follower (the authors define this as a preference-reduction effect). This implies that the firm can benefit in the production process from being a second-mover of the CSR innovation but may lose its first-mover advantage in terms of the preference-reduction effect. By finding and analyzing the sub-game perfect Nash equilibrium, the authors try to figure out the firms’ decisions on CSR innovation in various situations. Findings The authors find that the firms’ motivation of CSR innovation crucially depends on the fraction of the altruistic consumers, as well as the spillover effect and the preference-reduction effect. A large (small) fraction of the altruistic consumers attracts (restricts) both the leader and the follower to engage in CSR innovation. More importantly, when such fraction is not too large but stays at a relatively high level, a potential leader of the CSR innovation may not wish to innovate. Hence, the potential follower may be the monopolist in the market of the socially responsible product. In addition, the authors reexamine this result in a variation model where a leader can make its decision on the CSR innovation to be more flexible by allowing it can innovate in either periods 1 or 2. The authors demonstrate that when the fraction of the altruistic consumers falls in an intermediate range, the leader may wish to delay the CSR innovation to period 2. In such a case, the leader of the CSR innovation may tend to trade its first-mover advantage for head-to-head competition with the follower and prevents the follower from benefiting from the spillover effect. Moreover, a flexible choice on the CSR innovation brings greater initiative to a firm to be the leader of the innovation. Originality/value Nearly all the studies about firms’ decisions on CSR innovation are conducted in an environment of simultaneous move, which is not appropriate to describe the real business world; many pieces of evidence show that many CSR programs are launched sequentially rather than simultaneously. The theory identifies a couple of important factors of the CSR innovation in a more realistic situation, i.e. sequential more on CSR innovation. Both spillover effect and preference-reduction effect crucially affect the firms’ decision on innovating their products to be socially responsible, which contributes to the existing literature in CSR and strategic decision. This paper also sheds some light on managerial implications with CSR innovation under various situations of competition.

Corporate social responsibility in the wake of COVID-19: multiple cases of social responsibility as an organizational value

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jashim Uddin Ahmed ◽  
Quazi Tafsirul Islam ◽  
Asma Ahmed ◽  
Anisur R. Faroque ◽  
Mohammad Jasim Uddin
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Online Communication ◽  
Socially Responsible ◽  
Content Type ◽  
Internal Resources ◽  
Study Approach ◽  
The Face ◽  
Corporate Social ◽  
Organizational Value

Purpose Although corporate social responsibility is a well-researched concept, very few studies have studied organizational social responsibility in the face of internal/external crises. Therefore, this paper aims to examine various firms' organizational social responses to COVID-19 as an external crisis, particularly in terms of the way organizations use their resources to address social problems and the real intention behind these, and the changing organizational drivers influencing such behaviors. Design/methodology/approach The authors explore the initiatives of seven organizations from three different industries in several countries and their actions in the wake of the COVID-19 pandemic. A case study approach was taken to collect data and reach a conclusion. A combination of interviews, online communication using semi-structured questionnaires and documentary information available in the public domain was used to collect data and analyze and triangulate the events. Findings Similar internal resources and capacities of the seven organizations resulted in similar responses as they launched proactive initiatives to prepare sanitizers. This research indicates that these organizations pursued other goals besides economic one. When society needed help, these organizations responded quickly, using and reorganizing their resources to assist communities in need. Different organizations from different sectors all behaved in a similar manner, making genuine contributions to the pandemic as each was uniquely capable of doing. These organizations also used their unique capabilities to offer their resources to local communities and governments. Originality/value During the COVID-19 pandemic, efforts by corporate entities to facilitate social reform and recovery have been seen around the globe. The findings could help in understanding the responses of organizations engaging in socially responsible behaviors to overcome external crises. This paper also identifies changing organizational values and their possible impact on society and overall industry philanthropy practices in the future.

The impact of corporate social responsibility on financial distress: evidence from developing economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Farooq ◽  
Amna Noor
Keyword(s):  
Corporate Social Responsibility ◽  
Financial Distress ◽  
Z Score ◽  
Socially Responsible ◽  
Content Type ◽  
Financial Firms ◽  
Responsible Behavior ◽  
Corporate Social ◽  
The Impact ◽  
Practical Implications

Purpose This study aims to explore the role of corporate social responsibility (CSR) on the likelihood of financial distress for a sample of 139 Pakistan Stock Exchange (PSX) listed firms throughout 2008–2019. Design/methodology/approach The dynamic generalized method of moments (GMM) estimator is used to examine the impact of CSR on financial distress. The investment in CSR is measured through a multidimensional financial approach which comprises the sum of the contribution made by the company in the form of charitable donation, employees’ welfare and research and development, while the Altman Z-score is used as an indicator of financial distress. The higher the Z-score, the lower will be the probability of financial distress. Findings The authors find a significant positive impact of CSR on financial distress in GMM model. This finding is consistent with the shareholder view and over-investment hypothesis of CSR as management makes an investment in CSR to get personal benefits, which resultantly leads the firm toward financial distress state. Further, this positive relationship remains present for firms having strong involvement in foreign business through exports. Research limitations/implications Like other studies, the present study is not free from limitations. First, financial firms are skipped from the sample, although literature witnesses a lot of studies highlight the financial firms’ commitment to achieving CSR goals. Second, financial distress occurs in different stages, and this study fails to establish a linkage between CSR engagement at different stages of financial distress. In the future, researchers can make valuable addition by covering these missing links in present studies. Practical implications Findings suggest several practical implications. For policymakers, they should encourage firms to adopt more socially responsible behavior as it not only prevents them from distress but also comes with better investment behavior, minimize bankruptcies and make economies more strong and stable. Second, results suggest corporate managers emphasize socially responsible behavior as its benefits are beyond the “societal benefits” as it lessens financial distress through lower cost of debt, lesser financial constraints and reduced cost of information asymmetry, and it minimizes the cost of capital. Lastly, investors make risk premium assessments related to future earnings by determining the likelihood of financial distress in the future. Originality/value The study extends the body of existing literature on CSR and the likelihood of financial distress in Pakistan, which is according to the best knowledge of the authors, not yet studied before. The results suggest that policymakers may pay special attention to the quality of CSR while predicting corporate financial distress.

Corporate social responsibility and SME performance: a meta-analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stephen Oduro ◽  
Kot David Adhal Nguar ◽  
Alessandro De Nisco ◽  
Rami Hashem E. Alharthi ◽  
Guglielmo Maccario ◽  
...  
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Meta Analysis ◽  
Empirical Studies ◽  
Content Type ◽  
Analytic Review ◽  
Managerial Implications ◽  
Corporate Social ◽  
The Impact

PurposeThis study aims to draw on instrumental and ethical theories to offer a quantitative review of the extant literature on the corporate social responsibility (CSR)–small-medium enterprises (SMEs) performance relationship through a meta-analysis.Design/methodology/approachEmpirical studies from 57 independent peer-reviewed articles, including 66,741 firms, were sampled and analysed. Both subgroup and meta-regression analyses (MARA) were used to test the hypotheses of the study.FindingsThe authors' results demonstrated that social-oriented, economic-oriented and environment-oriented CSR activities have a positive, significant influence on overall, financial and non-financial performance of SMEs; however, the effect of social-oriented CSR activities is the strongest. Moreover, the impact CSR dimensions have on non-financial performance is stronger than on financial performance. Additionally, findings showed that the association between CSR and SME performance is positively and significantly influenced by contextual factors (i.e. sector and region of study) and methodological factors (i.e. performance measurement, study type, theory usage, sampling size and operationalisation of constructs).Originality/valueThe study is the pioneering meta-analytic review on the CSR–SME performance relationship, thereby clarifying the anecdotal results, synthesising the fragmented empirical studies and exploring the contextual and methodological factors that may account for between-study variance. Following the study's findings, the authors delineate insightful suggestions for future scholarship and fine-grained managerial implications for practitioners.

To B or not to B: Etsy’s decision whether to re-incorporate as a public benefit corporation and maintain its B Lab certification

2019 ◽  
Vol 15 (6) ◽  
pp. 510-527
Author(s):  
Gabriele Lingenfelter ◽  
Ronnie Cohen
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Regulatory System ◽  
Business Law ◽  
Publicly Traded ◽  
Socially Responsible ◽  
Content Type ◽  
Benefit Corporation ◽  
Academic Level ◽  
Corporate Social

Theoretical basis As the regulatory system begins to recognize the role of social responsibility reporting, reliable disclosure measures will be required. Issues of transparency, reliability and assurance are likely to arise as securities regulators consider whether and how to require disclosure of non-financial information. Various reporting models are presented in the case to illustrate different ways that these issues can be addressed by privately held and publicly traded corporations. Research methodology The case uses the company, Etsy, Inc., which has established itself as a publicly traded, socially responsible corporation. Etsy must decide whether it will re-incorporate as a benefit corporation in order to maintain its B Lab certification. This decision introduces students to the various measures of corporate social responsibility, the interests of the stakeholders of a corporation and the regulatory environment in which socially responsible, publicly traded corporations operate. The case uses only publicly available information. Case overview/synopsis This teaching case addresses the decision faced by Etsy, Inc. when it became a publicly traded corporation. In order to maintain its certification as a socially responsible corporation by B Lab, it would have to re-incorporate as a Delaware Benefit Corporation. In making this decision, the company had to consider various measures used for corporate social responsibility reporting and transparency and how these might affect Etsy’s stakeholders. Complexity academic level Undergraduate or masters level case that could be used in a business law, commercial law, legal environment or auditing course.

Apparel firms’ corporate social responsibility communications

2015 ◽  
Vol 28 (1) ◽  
pp. 37-55 ◽  
Author(s):  
Hongjoo Woo ◽  
Byoungho Jin
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Social Issues ◽  
Content Type ◽  
Csr Communication ◽  
Study Approach ◽  
Csr Reporting ◽  
The Usa ◽  
Managerial Implications ◽  
Corporate Social

Purpose – Corporate social responsibility (CSR) communication is a strategy to address companies’ goodwill to the society. Based on the institutional theory suggesting the influence of environmental factors of companies’ country-of-origins on their marketing practices, the purpose of this paper is to explore and compare the CSR communication practices of apparel firms from different countries. Design/methodology/approach – As a case study approach, this study investigates six apparel firms’ CSR communication disclosures on the official websites using a content analysis method and the Global Reporting Initiative’s categorial CSR reporting guidelines. Findings – Findings revealed that the six firms’ CSR communication adoption levels and focusses varied; the USA firms largely focussed on labor issues, while the European firms focussed on environmental issues and the Asian firms centered on social issues. Research limitations/implications – Although this study has limitations that pertain to case studies in general, this study provides academic contributions to the literature and managerial implications about different CSR focusses and communication activities across countries. Originality/value – CSR is especially important for the apparel business that highly involves social issues such as labor-intensive production. However, limited research showed how apparel firms are actually communicating CSR. This study was one of the early attempts on this topic.

Corporate social responsibility, product innovation, and product line

2020 ◽  
Vol 11 (2) ◽  
pp. 171-190
Author(s):  
Heng Xu
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Transportation Cost ◽  
Policy Formulation ◽  
Product Line ◽  
Responsible Innovation ◽  
Socially Responsible ◽  
Basic Product ◽  
Content Type ◽  
Corporate Social

Purpose This paper aims to investigate a firm’s incentive to innovate its basic product to be socially responsible and its decision on the product line. By constructing a competition model, the paper examines the factors that affect the firm’s choice on its product line with the socially responsible innovation in the presence of altruistic consumers. Such factors include the proportion of the altruistic consumers, the firm’s coordination cost with the basic and innovative products, as well as the consumer’s transportation cost. Design/methodology/approach In a model of differentiated products with the competition, the author assumes that a portion of consumers has a strong preference for the socially responsible product (e.g. altruistic consumers). A firm is able to attract altruistic consumers with a socially responsible innovation but it may incur a coordination cost when both the basic and the innovated products are manufactured and sold. In a framework of a sequential game, the firms make a decision on the prices, innovation inputs, as well as the choice on its product line to achieve the expected profit maximization. Findings The firm has the incentive to engage in socially responsible innovation to better compete with its rivals. More importantly, the results of the paper explain why some firms wish to manufacture and sell the basic product even though the innovation is successful. The main factors that affect such a firm’s decision include the proportion of the altruistic consumers, the aggregate benefit to all the consumers who purchase the innovative product, the firm’s potential coordination cost and the consumer’s transportation cost. Originality/value The paper sheds light on a firm’s corporate social responsibility innovation and its product line determination. The results of this paper can be widely applied in the firm’s strategy of engaging in corporate social responsibility with eco-friendly elements that can attract altruistic consumers in the market. In addition, the findings of the paper can also contribute to policy formulation in terms of innovation. Such a result enables the policymakers to understand the factors that affect the firm’s motivation on innovation and helps them to better guide the firms efficiently participate in the research and development activities.

Under pressure: exploring pressures for corporate social responsibility in mutual funds

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Caddie Putnam Rankin
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Mutual Funds ◽  
Mutual Fund ◽  
Socially Responsible ◽  
Content Type ◽  
Responsible Investment ◽  
Industry Standards ◽  
Corporate Social ◽  
Depth Interviews

PurposeThis empirical study seeks to understand how mutual fund firms interpret conflicting pressures to conform or differentiate in the context of corporate social responsibility (CSR). Research suggests that organizations engage in practices that conform to industry standards in order to be seen as legitimate members of their industry. Other studies suggest that organizations differentiate themselves in order to compete and outperform their rivals. Pressures for organizational conformity and differentiation are explored in two types of organizations in the mutual fund industry: socially responsible investment (SRI) and non-SRI firms.Design/methodology/approachThe research is based on qualitative in-depth interviews with twenty-six mutual funds.FindingsThe analysis revealed that pressures for conformity and differentiation were salient among mutual fund executives but emphasized differently for the two types of mutual funds.Originality/valueThe study concluded by suggesting SRI firms use both strategies of conformity and differentiation to amplify the message that they adhere to the values of CSR.

The third-person effects in the investment decision making: a case of corporate social responsibility

2018 ◽  
Vol 23 (3) ◽  
pp. 456-468
Author(s):  
Alexander V. Laskin
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Investor Relations ◽  
Socially Responsible ◽  
Content Type ◽  
The Third ◽  
Third Person ◽  
Corporate Social ◽  
Responsible Behaviors ◽  
The Third Person

Purpose The purpose of this paper is to apply a third-person effects theory to the study of corporate social responsibility communications. Previous studies have asked what importance investors assign to the socially responsible activities of corporations. However, in the context of publicly-traded companies, it becomes important not only to calculate the effects of available information on an individual investor, but also to estimate the effects of every piece of information on the investor’s perception of the investment community at large. Design/methodology/approach The study uses a survey methodology in order to evaluate what value respondents assign to socially responsible behaviors as well as to identify a presence of third-person effects in the corporate social responsibility evaluations. Using an online survey, the respondents were asked to read a modified news article and the respond to a series of questions. In total, 96 completed surveys were collected and analyzed. Findings The research finds the presence of third-person effects incorporate socially responsibility message processing. The results of the study show that, while individually people are supportive of the socially responsible behaviors of corporations, they perceive others to be less supportive of such behaviors; they also see others as less likely to encourage such behaviors through action. As a result, people are less likely to act on their own views of corporate socially responsibility as they perceive themselves to be outliers. These findings lead to important consequences for investor communications, which are discussed in light of the efficient market hypothesis. Research limitations/implications From an academic standpoint, the study proposed that in investor and financial communication, third-person effects could play a significant role. Yet, third-person effects research in investor relations literature simply does not exists. Thus, the study’s main contribution is expanding third-person effects theory into the field of the investor relations research. Practical implications From practical standpoint, expectations and perception of corporate social responsibility have a significant effect on corporate reputation and, thus, communication about corporate social responsibility become important as they shape these perceptions and expectations. Yet, such corporate social responsibility issues may include a variety of matters, such as governance, responsibility, and the quality of social and economic choices, sometimes even contradictory to each other. It becomes a job of investor relations managers to study, analyze, and respond to these competing demands. Social implications From societal standpoint, the study advances the debate on the role of corporations in the society. With such concepts as social license to operate and creating shared value, and the growing expectations about corporate behavior, understanding the stakeholders perceptions of socially responsible behavior of corporations as a function of their perceptions of other stakeholders’ viewpoints, creates a better understanding of the complexities involved in the issue of corporate social responsibility reporting. Originality/value Since investors and other financial publics are not homogenous and may have different perspectives, opinions, values, etc., they may react to the same information differently. Furthermore, they may expect others to behave differently and such perceptions, whether accurate or not, may, in fact, influence their own behavior, as third-person effects theory would suggest. Investor relations, then, becomes a function of managing these expectations. The presence of the third-person effects in investor communications can have a strong effect on market behavior and, thus, must become an important part of the investor relations professionals’ job – how the messages are crafted, communications, and measured. Yet, third-person effects is non-existent in the investor relations literature. Thus, the study provides an original contribution by applying a third-person effects theory in the investor relations research.

Awareness and attitude towards corporate social responsibility

2014 ◽  
Vol 56 (3) ◽  
pp. 231-246 ◽  
Author(s):  
Priyanka Jain ◽  
Saroj Kumar Datta ◽  
Ankur Roy
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Geographic Area ◽  
Small Sample ◽  
Socially Responsible ◽  
Content Type ◽  
Business Organisation ◽  
Day To Day Operations ◽  
Management Students ◽  
Corporate Social

Purpose – This paper is an attempt to explore the awareness and attitude of the management students towards corporate social responsibility (CSR). Students are perceived as future managers of the corporate world and their perception about CSR is deemed important to business organisations. The students can make companies understand their responsibility towards various stakeholders. The paper aims to discuss these issues. Design/methodology/approach – By doing a review of past literature, an appropriate scale consisting of forty-one items has been developed to measure the dimensions of CSR. Data were collected from 294 students of various business schools situated in Rajasthan (India). The data collected was subjected to exploratory factor analysis to extract the main dimensions that would bring out the attitudes of the students towards CSR. Findings – Results revealed that the companies should pay attention to accountability towards stakeholders, corporate governance, ethical commitment and humanitarian concerns besides fulfilling other responsibilities as covered under the eight factors identified in the study. Research limitations/implications – This paper used survey data from small sample of management students in a limited geographic area. Hence, it might be difficult to generalize the results to a larger, more representative population. The research also suggests how corporations can make CSR an integral part of the business organisation. Practical implications – The dimensions identified in the study if incorporated by the business in its day-to-day operations can make it socially responsible as well as socially acceptable in the true sense. Originality/value – This research makes an empirical contribution to identify the factors which management students expect business enterprises should do to be justified as socially responsible corporate citizens.

scholarly journals Impact of Corporate Social Responsibility on profitability of banks in Pakistan: Application of GMM Approach

2021 ◽  
Vol 3 (3) ◽  
pp. 360-372
Author(s):  
Mehreen Nazish ◽  
Muhammad Hanif Akhtar
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Generalized Method Of Moments ◽  
Capital Intensity ◽  
Socially Responsible ◽  
Control Variables ◽  
Policy Makers ◽  
Managerial Implications ◽  
Corporate Social

The present study investigates the effects of corporate social responsibility (CSR) on financial performance of commercial banks in Pakistan employing the generalized method of moments (GMM) estimator on a panel data. A diverse sample of 25 banks is selected for the analyses for a period of 11 years (2010-2020) based on consistently available data. In addition to the CSR index, some bank-specific and macroeconomic variables are used as control variables to test for the effects of CSR initiatives on profitability of banks in Pakistan. Our findings demonstrate that the CSR drives and commitments on social expectations reward the banks with larger profit margins. Consequently, the results tend to validate the stakeholder theory where socially responsible enterprises lead towards greater financial performance. The control variables like capital intensity, credit risk, bank size, liquidity, age of the bank, proportion of non-executive directors, tangibility and GDP growth divulge mixed results. The diversity in results propose a number of policy and managerial implications both for policy makers and banks managers.

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