Impact of corporate social responsibility intensity on firm-specific risk and innovation: evidence from Japan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Megumi Suto ◽  
Hitoshi Takehara
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Research And Development ◽  
Manufacturing Industry ◽  
Corporate Sustainability ◽  
Idiosyncratic Risk ◽  
Firm Level ◽  
Content Type ◽  
Specific Risk ◽  
Corporate Social

Purpose The purpose of this paper is to investigate investors’ perception of corporate social responsibility (CSR) and its risk-mitigating effects on firm-level innovation in Japan from 2006 to 2017. The authors examine the influence of CSR intensity on firm-specific risks, focusing on the risk-moderating effect of CSR on innovation. Design/methodology/approach The authors conducted a simple slope analysis and panel data regressions with input and output innovation measures and idiosyncratic risk based on an asset-pricing model. Findings The results demonstrate that CSR intensity not only reduces firm-specific risk directly but also indirectly by negatively moderating the relationship between firm-level innovation and idiosyncratic risk. Research limitations/implications Signaling trust to capital markets, CSR engagements in the manufacturing industry are clearly important for innovative firms with active research and development undertakings. Practical implications Corporate managers should further expand their efforts to make non-financial disclosures available, considering the interactions between CSR intensity and research and development financial risk. Originality/value In the context of Japanese firms, this study demonstrates the interaction between CSR practices and innovation activities from the perspective of long-term management of corporate sustainability.

Potentials of top management team career development and corporate social responsibility

2019 ◽  
Vol 24 (6) ◽  
pp. 560-579
Author(s):  
Yelin Hu ◽  
Qiwang Zhang ◽  
Xin Wang
Keyword(s):  
Corporate Social Responsibility ◽  
Career Development ◽  
Social Responsibility ◽  
Manufacturing Industry ◽  
Negative Relationship ◽  
Top Management ◽  
Manufacturing Companies ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to explore the relationship between potentials of top management teams’ (TMT) career development and corporate social responsibility (CSR) by examining listed manufacturing companies in China. More importantly, it tried to contribute to the understanding of the senior executive’s career development in the trend of upgrading the manufacturing industry. Design/methodology/approach The sample firms in this paper were selected from the China A-listed companies in the manufacturing industry. It collected CSR and TMT data from the Rankins CSR Ratings (RKS) Database and CSMAR database and applied the multiple regression to test the hypotheses. Moreover, it implemented the robustness test by using the standard regression method and the structural equation model. Findings The findings indicate that a firm’s CSR performance is significantly associated with TMT’s educational level and overseas background. The government background, academic background and financial background of high-level managers, instead, have a negative relationship with CSR performance. In addition, firm’s ownership moderates the relationship between TMT and CSR initiatives – the career development potential of TMT has different effects on promoting CSR in the context of different ownership. These relationships remain significant when the managers’ tenure, gender, age, wage and firm size are controlled. Research limitations/implications The empirical research on the potentials of executive career development and CSR is limited to linear assumptions. Since there are fewer overseas holding companies in Chinese state-owned and private enterprises, it failed to reflect international differences. Practical implications First, CSR is related to the potentials of TMT career development and also the potentials of TMT career development are associated with the structure of the TMT. Second, to improve CSR, it is necessary to distinguish the different ownership of companies and then adjust the TMT structure correspondingly. Last, senior executives should choose their career direction according to their own distinct and inherent career development potentials. Originality/value This study explores the relationship between potentials of TMT career development and CSR. It not only expands the research in the field of CSR but also enriches the research on the career development of top executives.

Integrated business model for sustainability of small and medium-sized enterprises in the food industry

2020 ◽  
Vol 122 (5) ◽  
pp. 1463-1483 ◽  
Author(s):  
Silviya Atanasova Topleva ◽  
Tsvetko Velchev Prokopov
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Business Model ◽  
Food Industry ◽  
Corporate Sustainability ◽  
Value Added ◽  
Simultaneous Optimization ◽  
Product Portfolio ◽  
Content Type ◽  
Corporate Social

Purpose The ecological footprint of the food industry and the requirements of the bio-based economy result in the need for deepening the concept of corporate sustainability. CSR provokes the implementation of eco-innovation with high value added. A main source of value added and sustainability is the integrated implementation of ecodesign practices . The purpose of this paper is to systemize an integrated model for the product ecodesign implementation, which combines not only the industrial and process ecodesign but also the overall organizational and socio-economic context of SMEs in food industry, reflected in CSR and value added for stakeholders. Design/methodology/approach The methodology for implementation of business model for sustainability of the SMEs in the food industry through ecodesign is based on vertical and horizontal integration of well-known self-relevant environmental, social and economic tools such as corporate social responsibility, life-cycle assessment, MET matrix, ecolabelling and stakeholder approach for production and marketing of high-value-added eco-products. Findings This study proposes an algorithm for implementation of an integrated business model for SMEs sustainability in the food industry, focusing on high-value-added delivery for stakeholders, based on corporate social responsibility, functional innovation and eco-efficiency. The ecodesign based on CSR business practice in food industry allows simultaneous optimization of environmental aspects and cost structure of products in conditions of improved quality and functionality. Thus, ecodesign contributes to the diversification not only of the company’s product portfolio, but also to opening of new marketplaces and the implementation of new market strategies by increasing the value added. Practical implications The research identifies actions, which SMEs in food industry can follow to achieve ecological redesign of their business and production processes that simultaneously enhance product functionality and resource efficiency. Originality/value The academic and the social value of the research is the focus on ecodesign and its implementation in SMEs in the food industry as a tool for creation of multidimensional high value added for stakeholders in bio-based economy.

Family firms and corporate social responsibility: exploring “concerns”

2017 ◽  
Vol 10 (4) ◽  
pp. 469-487 ◽  
Author(s):  
Nai Hua Lamb ◽  
Frank Butler ◽  
Philip Roundy
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Family Firms ◽  
Employee Relations ◽  
Family Ownership ◽  
Firm Level ◽  
Content Type ◽  
Public Firms ◽  
Level Data ◽  
Corporate Social

Purpose Scholars are devoting increasing attention to understanding a specific type of strategic initiative in family firms: corporate social responsibility (CSR). Prior studies have focused on the strengths of family firms’ CSR performance. However, to more fully understand family firms and their engagement in CSR, a granular approach is needed that teases apart the strengths and concerns of CSR performance and examines the specific dimensions that comprise CSR performance. Thus, the purpose of this paper is to theorize about six negative (i.e. concern-oriented) dimensions of family firms’ CSR performance. Design/methodology/approach To examine the interrelationship between a firm’s percentage of family ownership and its CSR concerns, a sample of 71 public firms from Fortune 500 companies was constructed. The sample includes 13 years of firm-level data spanning 1994-2006 and represents over 600 firm-year observations. Findings As predicted, a higher percentage of family owners’ equity is positively related to diversity-oriented CSR concerns and negatively related to employee relations and environmental CSR concerns. However, the percentage of equity owned by family members is not associated with community, product quality and safety, and corporate governance CSR concerns. Originality/value The paper addresses substantive omissions in existing research on the influence of family ownership on CSR performance.

The effects of corporate social responsibility on profitability

2016 ◽  
Vol 54 (6) ◽  
pp. 1383-1406 ◽  
Author(s):  
Sunghee Lee ◽  
Heungjun Jung
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Manufacturing Industry ◽  
Business Strategies ◽  
Socially Responsible ◽  
Return On Assets ◽  
Content Type ◽  
Corporate Social

Purpose – The purpose of this paper is to determine the effects of corporate social responsibility (CSR) on financial performance in firms in the Korean manufacturing industry. In addition, the authors examine the moderating role of differentiation and outside investment in the same relationship. Design/methodology/approach – The mixed methods are used in this study. The authors first take an analytical modeling approach, in which the authors assume that CSR has a positive effect on consumer perceptions, which in turn can improve firm performance. Subsequently, the authors verify the propositions with data from the Korean manufacturing industry. Additionally, the authors explore the moderating roles of various factors in the CSR-financial performance relationship. Findings – The results of the analysis demonstrate that the positive relationship between CSR and financial performance depends on the levels of product differentiation and outside investment. Specifically, these contingent variables magnify the effects of CSR on financial performance. Practical implications – This study is particularly useful to supply chain managers. According to the results, CSR may provide benefits for both manufacturers and retailers. As brand reputations can be source for competitive advantage, the analytical model suggests that products made by socially responsible firms are attractive to consumers. Originality/value – To the authors’ knowledge, there are few studies that examine the multiple moderating effects of differentiation and outside investment on the relationship between CSR and financial performance (return on assets). The authors thus provide a clearer understanding of the effects of CSR activity on firm profitability using these business strategies.

The effect of political risk on shareholder value and the mitigating role of corporate social responsibility (CSR)

2020 ◽  
Vol 46 (10) ◽  
pp. 1217-1230
Author(s):  
Pattanaporn Chatjuthamard ◽  
Pornsit Jiraporn ◽  
Pattarake Sarajoti ◽  
Manohar Singh
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Risk Mitigation ◽  
Shareholder Value ◽  
Political Risk ◽  
Shareholder Wealth ◽  
Firm Level ◽  
Exogenous Shock ◽  
Content Type ◽  
Corporate Social

PurposeThe study investigates the effect of political risk on shareholder value, using an event study and a novel measure of firm-level political risk recently developed by Hassan et al. (2017). In addition, the authors explore how corporate social responsibility (CSR) influences the effect of political risk on shareholder wealth.Design/methodology/approachThe authors exploit the guilty plea of Jack Abramoff, a well-known lobbyist, on January 3, 2006, as an exogenous shock that made lobbying less effective and less useful in the future, depriving firms of an important tool to reduce political exposure.FindingsThe results show that the market reactions are significantly more negative for firms with more political exposure. Additional analysis corroborates the results, including propensity score matching, instrumental-variable analysis and Oster's (2019) method for testing coefficient stability. Finally, the authors note that the adverse effect of political risk on shareholder value is substantially mitigated for firms with strong social responsibility, consistent with the risk mitigation hypothesis.Originality/valueThis study is the first to explore the effect of political risk on shareholder value using a novel measure. Furthermore, it is also the first to show that CSR alleviates the cost of political risk to shareholders.

Corporate social responsibility and idiosyncratic risk in the restaurant industry: does brand diversification matter?

2020 ◽  
Vol 32 (9) ◽  
pp. 2925-2946
Author(s):  
Ozgur Ozdemir ◽  
Ezgi Erkmen ◽  
Minji Kim
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Risk Reduction ◽  
Idiosyncratic Risk ◽  
Cash Flows ◽  
Restaurant Industry ◽  
Content Type ◽  
Restaurant Firms ◽  
Reduction Effect ◽  
Corporate Social

Purpose This study aims to examine the link between corporate social responsibility (CSR) and idiosyncratic risk in the restaurant industry. The study also explores whether brand diversification magnifies the risk reduction effect of CSR in the restaurant industry. Design/methodology/approach The study uses an unbalanced panel of 274 firm-year observations for 43 restaurant firms over the period 1995–2015. Models are estimated via fixed effect regression with robust standard errors. Findings The study finds that CSR involvement reduces idiosyncratic risk and this risk reduction is intensified when restaurant firms operate a portfolio of brands. Research limitations/implications The study’s findings are limited to restaurant industry, therefore, generalization of the findings to other industries requires delicate care. Brand diversification is a simple brand count due to a lack of brand sales data. Practical implications CSR activities are not cost burden for restaurant firms. Indeed, CSR could be a viable strategy to reduce the volatility in future expected cash flows, hence the idiosyncratic risk. This risk reduction could help owners/managers access to capital with lower cost. Moreover, the study suggests that CSR practices should not be implemented in isolation from firm marketing strategy such as portfolio of brands. Originality/value Although prior hospitality research puts forth some evidence using systematic risk as the measure of firm risk, this measure may not best suit the purpose in CSR context given that CSR is a direct, firm-specific strategy. Hence, the current study provides both new evidence with firm-specific, idiosyncratic risk and introduces an important contingency situation when the risk reduction effect of CSR would become more profound for restaurant firms.

Corporate social responsibility, green innovation and competitiveness – causality in manufacturing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carmen Paola Padilla-Lozano ◽  
Pablo Collazzo
Keyword(s):  
Corporate Social Responsibility ◽  
Supply Chain ◽  
Social Responsibility ◽  
Emerging Market ◽  
Manufacturing Companies ◽  
Green Innovation ◽  
Firm Level ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this paper is to explore the interplay of corporate social responsibility (CSR) and green innovation in boosting competitiveness in manufacturing in an emerging market context. This study adds green innovation as mediator in the relationship between CSR and competitiveness. Design/methodology/approach A model with three second-order constructs is developed and tested, in a sample of 325 managers from manufacturing companies in Ecuador, using quantitative and cross-section methods. Findings After obtaining adjusted and validated measurement models, a structural equation model was conducted, where the main hypotheses were confirmed, providing empirical evidence that CSR and green innovation significantly influence manufacturing competitiveness in a developing economy. Research limitations/implications This study considers only manufacturing companies in Ecuador, focusing on CSR practices in a single territorial case study. It arguably contributes to reinforce the business case for CSR, with new evidence on the causal relationships between CSR, green innovation and competitiveness, in the context of emerging market manufacturing industries. Although the literature often points at a positive relationship between CSR and firm-level competitiveness, supporting empirical evidence remains scarce. This model, introducing green innovation as mediator in the relationship between CSR and competitiveness in developing markets, accounts for a novel theoretical approach. Practical implications The findings are consistent with previous research, reporting the positive influence of CSR activities on organizational competitiveness, reducing risks and cost structures, as well as improving the relationship with employees, enhancing talent attraction, retention and productivity. Incorporating formal CSR tools to the model allowed us to highlight the relevance of ‘green’ certifications as a means to provide a competitive edge, along with increased bargaining power in the supply chain, resulting in competitiveness gains. The findings on the role of green innovation suggest a transition from cost-savings to a more strategic leverage on responsible innovation as a source of competitive advantage. Social implications Additionally, this research contributes to shed light on the impact of green processes and product innovations on social and environmental performance, providing evidence of a more efficient use of energy and natural resources, increasing productivity and by extension, profitability. CSR shapes an innovation culture that, through the use of social, environmental and sustainability controllers, can create new business models, products, services or processes that boost both firm-level and supply chain productivity, benefits that eventually spill over to the host community. Originality/value This study aims at bridging the research gap on the interplay of CSR, green innovation and competitiveness in manufacturing in an emerging market context.

Corporate social responsibility and earnings management in the EU: a panel data analysis approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Panagiotis E. Dimitropoulos
Keyword(s):  
Corporate Social Responsibility ◽  
Panel Data ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Reporting ◽  
Negative Association ◽  
Content Type ◽  
Corporate Social ◽  
The Eu

Purpose Over the past decades, corporate social responsibility (CSR) has been considered as a significant corporate strategy and also has been documented as a main information dissemination mechanism of corporations to shareholders, creditors and other external stakeholders. This fact makes the CSR activities and CSR performance interconnected with the quality of firms’ financial reporting. The purpose of this paper is to study the impact of CSR performance on the earnings management (EM) behaviour using a sample from 24 European Union (EU) countries summing up to 121,154 firm-year observations over the period 2003–2018. Design/methodology/approach The study uses a multi-country data set with various dimensions of CSR performance including indexes regarding workforce, community relations, product responsibility and human rights protection. The empirical analysis is conducted with panel data regressions. Findings Evidence supports the negative association between CSR and EM indicating that high CSR performing firms are associated with less income smoothing and discretionary accruals, thus with higher financial reporting quality. Practical implications Regulatory agencies in the EU could use the findings of the study for the improvement of the accounting framework via enhancing the use and publications of social and environmental responsibility information and reports. Social implications Also, the current paper could be of interest not only to academic researchers but also to potential and existing investors in European corporations. The negative association between CSR performance and EM could be used by investors in assessing the risk of firms and the quality and reliability of their financial information. Originality/value This is the first study within the EU, which considers the multi-facet characteristics of CSR on the quality of accounting earnings and offers useful policy implications for regulators and investors.

Consequences of corporate social responsibility on employees

2019 ◽  
Vol 49 (1) ◽  
pp. 231-249
Author(s):  
Evans Asante Boadi ◽  
Zheng He ◽  
Eric Kofi Boadi ◽  
Josephine Bosompem ◽  
Philip Avornyo
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Social Exchange ◽  
Structural Equation ◽  
Social Exchange Theory ◽  
Banking Sector ◽  
Work Motivation ◽  
Content Type ◽  
Time Lagged ◽  
Corporate Social

Purpose The purpose of this paper is to draw on affect social exchange theory and related literature to develop and test a research model linking employees’ perception of corporate social responsibility (CSR) to their outcomes [performance and organisational pride (ORP)] with moderating variables: perceived work motivation patterns (autonomous and controlled motivation) to sustain firm’s operations through their employees. Design/methodology/approach The authors used Ghana as a case for this study due to recent turbulences in the banking sector of Ghana. A sample data of 244 subordinate/supervisor dyads from rural and community banks was collected with a time-lagged technique and analysed through a structural equation modelling for this study. Findings These employee’s perceptions of CSR positively related to their performance and ORP. Autonomous motivated employees had a stronger positive moderated impact on perceived CSR-Performance link whereas controlled motivated employees recorded a stronger impact on perceived CSR-ORP link. Practical implications Based on these results, managers and human resource (HR) professionals can aim at acquiring favourable employees’ perception of their firms’ CSR initiatives. In that, it can help firms to remain in business particularly in difficult times. Also, autonomous and controlled motivators may seem inversely related, however, they are not contradictory to each other. Both can coexist within a firm and it is crucial that HR professionals and managers endeavour to balance them discreetly to attain organisational goals. Originality/value Despite the growing interest in CSR across continents, CSR outcomes on employees among small and medium scale firms especially in Africa has fairly been toned-down by respective management of firms, governments and researchers.

Board diversity and corporate social responsibility in Jordan

2016 ◽  
Vol 14 (2) ◽  
pp. 279-298 ◽  
Author(s):  
Abdul Hadi Ibrahim ◽  
Mustafa Mohd Hanefah
Keyword(s):  
Corporate Social Responsibility ◽  
Data Analysis ◽  
Panel Data ◽  
Social Responsibility ◽  
Panel Data Analysis ◽  
Arab Countries ◽  
Board Diversity ◽  
Content Type ◽  
Csr Disclosure ◽  
Corporate Social

Purpose This study aims to investigate the impact of board diversity characteristics, namely, independence, gender, age and nationality of directors on the level of corporate social responsibility (CSR) disclosures. Design/methodology/approach Content analysis was used to determine CSR disclosure. This study used panel data analysis to investigate the influence of board diversity characteristics on CSR disclosures. Findings Panel data analysis show that the level of CSR disclosure has increased over the period of study. Results also reveal a positive and significant association between the level of CSR disclosure and board diversity variables. Research limitations/implications This study examined only companies listed on Amman Stock Exchange. Therefore, the generalisation of the results might be limited to the listed companies only. Practical implications Findings are relevant to policymakers, professional organisations and practitioners in Jordan and in other Arab countries. Social implications The role of women in the boardroom is important to ensure more CSR activities by the listed companies. Jordan being a Muslim country should take the initiative to introduce laws to increase the number of women to the board. Originality/value This study offers significant contributions to existing CSR literature in Jordan and in other Arab countries by introducing female directors. Findings are important to policymakers. They should implement quotas for women in the boardroom, and adopting such a policy will increase the participation of women in the decision-making process of the companies and reduce gender bias.

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