Social responsibility, corporate giving and the tide

Abstract

Purpose The purpose of this paper is to address firms’ decisions on corporate social responsibility (CSR) as a function of the economic environment. The paper focuses on corporate giving, a CSR dimension that is especially important in an economic downturn such as the one experienced by many European economies since 2007-2008. Design/methodology/approach A theoretical framework comprising product differentiation and market competition is proposed. The paper investigates whether adverse economic conditions refrain corporate giving or, alternatively, stimulate it as a differentiation and demand enhancing instrument. Econometric empirical testing on the business cycle properties of giving at an aggregate level is also conducted. Findings According to theoretical results, firms seem to refrain giving under adverse economic conditions in the short run. Empirically, the paper concludes for a pro cyclical contemporaneous relation of corporate giving with real gross domestic product, supporting the theoretical finding. In a dynamic perspective, however, giving causes revenues and firms tend to donate more than a few years after the downturn. Originality/value The paper examines the behaviour of an under researched component of corporate social responsibility, which is especially important in economic downturns - giving. It considers continuous degrees of market competition and differentiation.

CEO letters: Social license to operate and community involvement in the mining industry

“…As opposed to other studies and industries (Catalão-Lopes et al, 2016;Gao & Hafsi, 2017), we cannot conclude that mining firms with more resources donate more. On the other hand, studies in non-mining industries indicate that companies started to give more information about the community in their reports when their situation changed after the crisis (Dias et al, 2016;García-Benau et al, 2013).…”

“…For example, Gao and Hafsi () stated that companies with more resources could give more. Catalão‐Lopes et al () corroborated this result in their analysis of companies in the United States, finding that a company’s revenue affects corporate giving.…”

“…What factors influence the implementation of SLO? Considering what the literature has stated about CSR, it could be suggested that the participation of companies in communities to achieve SLO is determined by a firm’s resources and situation (Catalão‐Lopes, Pina, & Branca, ; Gao & Hafsi, ), the locations where mining companies operate (Prno & Slocombe, ) and the CSR guidelines related to the mining industries (Koivurova et al, ; Ranängen & Lindman, ). With respect to these guidelines, over the last few years, CSR reporting has evolved in the mining industry and several CSR principles and guidelines set out by international organisations have been incorporated into their reports.…”

Corporate social responsibility and firm performance: a theory of dual responsibility

“…As our sample consisted of large, publicly listed firms in North America, establishing the generalizability of the relationships will require replication of the analysis with non-US firms, small firms and privately held firms. Second, economic cycles can have significant impact on firm decisions and actions including CSR (Catalão-Lopes et al, 2016), it is important to test the temporal stability of the relationships during different time periods. Given that the time period of our study included both periods of economic growth and recessionary periods, we believe that our results have reasonable generalizability.…”

Do Distinct CSR Categories have Distinct Determinants? The Roles of Market Structure and Firm Size

“…It needs to be understood along its determinants to ensure that its potential is fully gathered. The literature has validated numerous influences on CSR, such as the business cycle (Catalão‐Lopes et al, ), the family nature of the firm or the presence of institutional owners (Lamb and Butler, ). Pressure from various sources (social, from stakeholders, value‐chain or customers) has been pointed out (Bénabou and Tirole, ; Darnall et al, ; Baron, ), as well as the use of CSR as a means to counter negative publicity (Vanhamme and Grobben, ).…”