Emergence of corporate political activities in the guise of social responsibility: dispatches from a developing economy

PurposeThe objective of this paper is to investigate the emergence of corporate political activities (CPAs) in the form of social responsibility in the banking sector in Bangladesh. The use of institutional logics allows the authors to explore not only the motivations underlying this sudden shift in corporate approach towards corporate social reporting (CSR) disclosure but also to investigate whether a logical plurality exists in this new approach.Design/methodology/approachThe analysis is based on 21 in-depth interviews with policymakers, regulatory bodies and top management and members of boards of directors in the banking sector.FindingsThe findings of this study are both consistent with and different to those of Uddin et al. (2018). While their findings show that Bangladeshi companies engage in CSR activities primarily to demonstrate their allegiance with the ruling political regime driven by notions of traditionalism, this study’s findings show the existence of a logical pluralism across industries in the manner they engage with CSR activities and disclosures. In addition to the dominant market logic, the authors also find the co-existence of community and family logics shaping the nature of CSR disclosures made by banking companies in Bangladesh.Originality/valueThe authors contribute to the accounting and management literature by providing first-hand evidence of the motivations underlying the emergence of CPAs in the context of a developing country. The adoption of an alternative theoretical framework allows the authors to identify the multiple logics that dictate corporate attitude towards CSR engagement and disclosure.

The Synergistic Financial Effect of Corporate Political Activities: The Case of Listed Canadian Companies

Corporate political activities can bring genuine political capital to firms and are an effective way to access key resources to boost financial capital and maximize profits. These activities fall into three categories: coopting ex-politicians to decision-making bodies (board of directors and top management) to benefit from their social capital; lobbying to directly influence public policy; and making financial contributions to the activities of political parties and committees. This study asks the following question: what is the combined effect of two of these activities (political connections and lobbying) on the financial and accounting indicators of Canadian listed companies? We argue that engaging in corporate political activities allows firms to accumulate a type of political capital that we define as the sum of all political activities conducted by an individual company. To perform our research, we analyzed Canadian companies listed on the S&P/TSX composite index from 2012 through 2016. Results show that firms with this type of political capital are generally in a better financial position than those without it. A significant correlation was found between a firm’s political capital and its main sources of financing (equity and long-term debt) as well as with its ROE. Political capital has more positive impacts on key firm financial indicators than does each type of political activity on its own (synergistic effect).