The interplay of corporate social responsibility and corporate political activity in emerging markets: The role of strategic flexibility in non‐market strategies

To explore the motivations underpinning corporate social responsibility (CSR) decisions in China, a country characterized by extensive government intervention, this paper investigates whether building a good relationship with the government is a political incentive that is driving firms to conduct CSR by examining the effects of political connections on the latter. Our results indicate that politically connected firms exhibit better CSR. However, the effect is considerably more significant for firms with existing political relationships. Additionally, findings show that the effect is more prominent in firms for which political connections are more valuable, namely, non‐state‐owned enterprises, small firms, and firms operating in less market‐oriented cities, indicating that CSR can serve as a differentiation strategy to compete against other bidders. Dividing CSR activities into economic, environmental and social aspects, we find that the social‐based activities are more likely to be driven by political motivations. By categorizing CSR and political connections, this paper not only expands the scope of political CSR and renders the generated results that have been mixed together more distinguishable, but also provides a more precise understanding of the fundamental drivers of CSR in China from the perspective of resource exchange.

Section: Institutional Background and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Political connections and corporate social responsibility: Political incentives in China

Liu

2020

“…Corporate philanthropy may vary depending on the sector of activity of the company (Ahen & Amankwah-Amoah, 2018;Beschorner & Hajduk, 2017;Kamasak, James, & Yavuz, 2019). In this sense, philanthropic actions occur more frequently in the most environmentally and socially sensitive industries, where legitimacy is more critical (Cha & Abebe, 2014;Gómez-Bezares et al, 2017;Yu et al, 2017), and in those most sectors exposed to demands from certain stakeholders, such as SRI investors, NGOs, and government institutions (Gao & Hafsi, 2017;Riedl & Smeets, 2017;Sethi et al, 2017a).…”

Section: The Moderating Effect Of the Business Sectormentioning

confidence: 99%

How market value relates to corporate philanthropy and its assurance. The moderating effect of the business sector

Arco-Castro

Pérez

Pérez-López

et al. 2020

Corporate philanthropy strategy integrated into the core business constitutes a novel vision and a little‐explored field of study with regard to corporate social commitment. The goal of this study is to analyse how the diverse ways of managing and assuring philanthropy can be considered signals of a firm's social commitment and consequently affect its market value. In addition, the analysis considers whether the business sector moderates those relationships. We aim to provide a comprehensive vision of corporate philanthropy and its effect on market value. From a sample of 965 firm‐years, of 193 firms from 2011 to 2015, we found that the market responds positively to the professional, independent management of philanthropy via a foundation, in preference to donations, and welcomes external assurance of corporate philanthropy as a set of actions that improve the perceived reliability of philanthropic activities. In addition, we observe a moderating effect of the business sector on the relationships among corporate philanthropy, assurance and the company's market value. The main contribution of this study is the provision of new evidence of how corporate philanthropy and its assurance are effective signals that reduce the information asymmetries between firms and investors, affecting company market value positively.

“…In democratic countries where the government shoulders greater political and social responsibilities, corporations are generally less expected to engage in CSR. In some countries, the effect of CSR depends on corporations' political positions (Kamasak, James, & Yavuz, 2019). In other cases, corporations may not even have the freedom to respond to social issues without political consequences.…”

Section: Institutional Influence and Nbs Theorymentioning

confidence: 99%

Cross‐sector alliances in the global refugee crisis: An institutional theory approach

Yang

Liu

Wang

2020

The global refugee crisis has posed severe challenges to social stability and sustainable development around the world. While the business sector is expected to shoulder social responsibility in crisis relief efforts, our initial assessment shows that refugee‐related corporate social responsibility (CSR) significantly diverged across the Global Fortune 500 corporations. To advance scholars and managers' understanding of this complex CSR issue, this study draws upon National Business System Theory to explore how country‐level factors influence the multinational corporations' CSR communication about the refugee issue. Specifically, the study focuses on the strategic cross‐sector alliances between corporations, NGOs, and IGOs. The analysis shows that in this controversial global crisis, the following factors of corporations' countries‐of‐origin can significantly affect the level of cross‐sector CSR alliances: democracy levels, economic inequality levels, and unemployment rates. Findings of this study provide practical guidelines that can help managers to anticipate societal expectations when dealing with controversial social issues in an international setting. Our findings could also assist policymakers, NGOs, and IGOs to better design strategies to mobilize the corporate resources.