Does Core Competence Affect Corporate Social Responsibility?

Abstract

Core competence is the key factor in the competitiveness of enterprises. This study examines whether enterprises with stronger core competence have the ability and motivation to fulfill more corporate social responsibilities. Taking the non-financial companies listed in the A-share market in China from 2010 to 2019 as the research samples, this paper constructs the measurement index of core competence by text analysis method and empirically tests the impact of core competence on corporate social responsibility. We find that the stronger the core competence is, the higher the corporate social responsibility will be, which means core competence can significantly improve corporate social responsibility. This conclusion remains significant after a series of robustness tests. The mechanism test shows that the impact of core competence on corporate social responsibility is realized by enhancing financial strength and increasing external attention. Further research shows that the relationship between core competence and corporate social responsibility are affected by the nature of the enterprise and the degree of market competition. When the enterprise is a non-state-owned enterprise or the industry competition is more intense, the influence of core competence on corporate social responsibility is stronger. This paper reveals the important impact of core competence on corporate social responsibility, which not only enriches the literature on the economic consequences of core competence and the influencing factors of corporate social responsibility but also has a certain practical significance for how to improve corporate social responsibility.

The impact of corporate social responsibility directed toward employees on contextual performance in the banking sector: A serial model of perceived organizational support and affective organizational commitment

“…CSR has been categorized in a number of ways depending on a variety of factors (Lythreatis et al, 2020; Sun et al, 2021). According to Porter and Kramer (2006), it can be classified into strategic ( to obtain competitive advantage ) or responsive ( stakeholder demands ) CSR.…”

The Impact of Financial Redundancy on Corporate Social Responsibility Performance: Evidence From Chinese Listed Firms

“…Table 1 summarizes the descriptive statistics. There are big differences in social responsibility scores between different firms, the mean and median of CSR are 23.758 and 21.900, respectively, the median is lower than the mean, suggesting that the level of CSR in China at a relatively low level ( Sun et al, 2021 ). The minimum and maximum values of the five sub-indicators of CSR are far from each other, indicating that the development of social responsibility in China is extremely unbalanced.…”

“…The total score of Hexun is 100 points. The Hexun CSR score is being increasingly used and recognized as the most authoritative indicator of CSR performance of Chinese listed firms ( Hou et al, 2021 ; Sun et al, 2021 ). Hence, to analyze the CSR performance of listed firms and avoid sample selection bias, the CSR data were obtained from Hexun.…”

“…In addition, external attention will enhance the supervision effect of the external market. Greater external attention will result in severe penalties for firms that evade their social responsibility or fail to meet public expectations ( Sun et al, 2021 ). Such firms, especially those that have financial redundancy, are likely to suffer reputational damage for not participating in CSR initiatives.…”

“…Socially responsible investment is one of the investment behaviors of firms. Firms have a hierarchy of investment priorities, and prior research has suggested that firms place their core business investment needs at the top of this hierarchy and CSR lower down ( Waddock and Graves, 1997 ; Sun et al, 2021 ). One critical implication of this is that firms’ CSR-related actions may depend on whether their core business investment needs have already been met; that is, firms will undertake social responsibility only after satisfying normal corporate operations and thereafter having surplus resources.…”