Executive Incentives Matter for Corporate Social Responsibility under Earnings Pressure and Institutional Investors Supervision

This paper theoretically explores the impact of the incentive preferences of executives (i.e., short-term incentives and long-term incentives) on corporate social responsibility (CSR) decisions (i.e., institutional CSR and technical CSR). Further, the paper presents the mechanism through which executives influence CSR activities by the pressures from financial analysts and institutional investors supervision. Using a large sample of China-listed firms over 2007–2017, we achieve some helpful empirical results. The executives with short-term incentives tend to implement technical CSR strategy, while those with long-term incentives tend to implement institutional CSR strategy. Executives with short-term incentives, compared with those with long-term incentives, show stronger inter-temporal tradeoffs behaviors in the earnings pressure context. Furthermore, dedicated institutional investors can effectively attenuate the hypocritical behaviors of executives, and the effectiveness of governance shows a positive relationship with investors’ horizon. Our findings enrich the understanding on the relationship between the executives and CSR decisions in the earnings pressure context and further helps to perfect the institutional design in China’s listed companies.

Institutional CSR: provision of public goods in developing economies

Purpose This paper aims to introduce the concept of institutional CSR and explains its antecedents, key characteristics and the potential implications arising from private firms providing public goods and services in developing economies. Design/methodology/approach The paper conceptualises institutional CSR using key insights from institutional theory along with legitimacy theory. It integrates the antecedents of CSR at the state and society levels and shows how firms may respond to these antecedents within an integrated institutional CSR framework. Findings The paper derives six distinct characteristics of institutional CSR and presents a conceptual model to inform how institutional CSR occurs in practice. Practical implications This paper brings to the attention the need for private firms that undertake institutional CSR activities to engage more closely with the state to ensure better societal outcomes. Social implications The paper identifies the importance of resource coordination between the state and the firm for the efficient and effective provision of public goods and services. Without such coordination, moral hazard, resource imbalances and long-term viability concerns pose a risk for institutional CSR activities. It furthermore highlights important implications for societal governance. Originality/value The paper makes an important contribution to the literature on CSR practices within developing economies by conceptualising institutional CSR in providing public goods and services.

Deploying partial least squares to investigate the influence of managerial assumptions on corporate social responsibility in the hotel industry

Purpose This paper aims to investigate the interplay between managerial assumptions and institutional corporate social responsibility, and determines how such fit affects performance. Design/methodology/approach The authors developed and tested a model using survey methodology. The authors’ data from 210 hotels located in Qatar and the UAE were analysed using the partial least squares (PLS) approach. Findings The results reveal that firms with entrepreneurial, political and professional frame of reference (FoR) engage in institutional corporate social responsibility (CSR) practices. In addition, the entrepreneurial and professional FoR enhances the institutional CSR – organisational performance link. Research limitations/implications The findings will help managers to determine the effect of their FoR on their adoption of institutional CSR, thereby increasing the effectiveness and efficiency of their CSR strategy. As the study is exploratory in nature, several limitations have been highlighted and discussed. Originality/value To the authors’ knowledge, this is one of the few papers that inspect the relationship between managerial assumptions and institutional CSR and establishes their effect on performance.

Does CSR Contribute to Sustainable Development? What a Régulation Approach Can Tell Us

We argue that corporate social responsibility depends on two distinct stylized facts concerning régulation and power. The first—institutional CSR—is institutional in nature, the other—strategic CSR—is economic and productive. The former permits and stabilizes the latter, which in turn gives rise to political compromises structuring institutional mechanisms. CSR strategies and institutions correspond to a private, oligopolistic régulation which shows no signs of being able to pursue a sustainable development regime. JEL classification: B52, D02, L15, M14, P17

The Effects of Institutional Corporate Social Responsibility on Bank Loans

The authors study the impact of institutional corporate social responsibility (CSR)—defined as CSR targeted at a borrowing firm’s secondary stakeholders—on bank loans. Findings suggest that higher levels of institutional CSR are associated with lower levels of interest rates and loan spreads. In addition, institutional CSR also tempers the positive impact of loan maturity and firm leverage on interest rates and loan spread. These effects were strongest among firms that demonstrated sustained performance, rather than among firms that showed mixed performance in terms of their secondary stakeholder-related activities. This study indicates institutional CSR is valued by stakeholders for its risk mitigating and transaction cost reducing effects independent of technical CSR, defined as CSR targeted at primary stakeholders.