What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility (CSR) practices? We argue that in emerging economies, firms that adopt CSR practices positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm's financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institutionbased view can jointly contribute to the CSR literature.

Research question/issue This study examines whether there is decoupling between how firms communicate about corporate social responsibility (CSR) and what firms do in terms of CSR. We argue that this CSR decoupling is driven by the CEOs' cognitive biases. Specifically, we propose that overconfident CEOs increase CSR decoupling. Research findings/insights We tested our arguments in a sample of S&P 500 firms for the period of 2006–2014. We find that CEO overconfidence is positively related to the decoupling between the optimistic tone of CSR reporting and the firm's actual corporate social performance. However, the board of directors mitigates the effect of CEO overconfidence on CSR decoupling when outside directors have CSR expertise and ownership incentives. Theoretical/academic implications Previous studies have suggested that CSR decoupling is a function of opportunistic management that can be constrained by external monitoring. We examine CSR decoupling as a function of cognitive biases (such as overconfidence) that can be constrained by internal monitoring. Practitioner/policy implications This study provides insights into the conditions when CSR information released by the firm is symbolic. Practitioners may prevent such symbolic CSR reporting by imposing effective oversight by the board of directors.

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The link between corporate philanthropy and firm value has been controversial. On one hand, corporate philanthropy is often criticized as an agency cost because it may serve narrow managerial self-interests. On the other hand, corporate philanthropy may enhance firm value because it improves the relationships between firms and their stakeholders. In this study, we argue that this controversy is contingent upon whether corporate governance mechanisms can stimulate the financial benefit of corporate philanthropy. Based on a sample of U.S. firms from 1996 to 2003, we find that CEO long-term pay positively moderates the relationship between corporate philanthropy and firm value while multiboard outside directors negatively moderate this relationship. Contrary to our expectations, we find that the relationship between corporate philanthropy and firm value enhances as CEO tenure increases. Our findings show that corporate governance plays an important moderating role in the relationship between corporate philanthropy and firm value.