Determinants of corporate social responsibility disclosures: Evidence from India

Over the last few decades, a number of studies, mostly in the western countries, have investigated the nature and frequency of corporate social responsibility disclosures, their patterns and trends, and their general relationships with corporate size and profitability. This study seeks to extend the knowledge regarding the relationship between a number of financial and non-financial corporate characteristics and the level of social responsibility disclosures based on an extensive sample of top Indian companies. Corporate size and industry category are found to correlate with the corporate social disclosures of the companies and the corporate reputation as recognised through awards and social ratings has also been observed to be a significant factor that influences the social disclosures made by the Indian companies.     

We are who we are: Incorporation of individual culture in customer satisfaction models

Despite the increasing recognition that cultural values have a major impact on consumer behavior, few studies have investigated the effect of individual culture on customer satisfaction in the global banking sector. This study designs a model of customer satisfaction that incorporates Uncertainty Avoidance (UA), and tests it among a sample of 227 Arab customers in the UAE banking sector through structural equation modeling using LISREL. Arab customers are reported to have a high UA, and it would thus be pertinent to determine how this cultural trait affects their consumer satisfaction. It was determined that perceived value and UA are direct antecedents of corporate reputation that in turn has a strong effect on satisfaction. Unexpectedly, service quality was not found to affect satisfaction. Various theoretical and managerial implications arising from the study findings are discussed, as well as potential avenues for further research in this important area.     

The disclosure of corporate social responsibility reports and sales performance in China

Based on legitimacy and stakeholder theory, we investigate whether there is an association between the disclosure of corporate social responsibility reports and a firm's sales performance in China. The empirical results reveal that the return on sales and sales growth are positively associated with the level of corporate social responsibility reporting in China. This positive association is strengthened when firms have concentrated customers. Firms use corporate social responsibility reports to improve sales performance and attract customers, who are one of their major stakeholders, and retain their legitimacy.     

Halo effect or fallen angel effect? Firm value consequences of greenhouse gas emissions and reputation for corporate social responsibility

Greenhouse gas (GHG) emissions are perceived to have negative consequences for society at large by contributing to potential climate change and represent a potential cash drain from firms from exposure to future regulatory, abatement, and compliance costs. Beginning in 2010, US companies are required to report their GHG emissions to the Environmental Protection Agency (EPA). We utilize these data for 2010–2014 to examine whether the possible adverse firm value impact of these GHG emissions is alleviated or exacerbated by the firm’s reputation for corporate social responsibility. Our findings suggest that there is no halo effect, i.e., a firm’s reputation for social responsibility (as reflected in its CSR score) does not protect the firm from the adverse firm value effects of GHG emissions. Rather, our findings suggest a fallen angel effect, i.e., for any given level of GHG emissions, the higher the firm’s CSR score, the greater the adverse impact on firm value. In other words, the decline in firm value due to the adverse impact of GHG emissions is compounded by the hit to the firm’s reputation for corporate social performance. Our paper contributes to the sparse prior US literature on the firm value effects of GHG emissions. Further, by providing scholarly evidence on the existence of a fallen angel effect, our findings suggest that boards and managers of firms that provide voluntary CSR disclosures cannot afford to be complacent about their GHG emissions.     

The impact of corporate characteristics on social responsibility disclosure: A typology and frequency-based analysis

Since the mid-1970s a number of studies have investigated the nature and frequency of corporate social responsibility disclosures, their patterns and trends, and their general relationships to corporate size and profitability. This study seeks to extend our knowledge of the relationship between a number of corporate characteristics and specific types of social responsibility disclosures, based on an extensive sample of U.S. corporate annual reports. Corporate size and industry category are found to correlate with certain types of disclosures while the existence of a corporate social responsibility committee appears to correlate with one particular type of disclosure.     

Corporate social responsibility: An umbrella or a puddle on a rainy day? Evidence surrounding corporate financial misconduct

We examine the way a fraudulent firm's pre‐ and post‐misconduct corporate social responsibility engagement is associated with its stock performance to investigate the reputational role of corporate social responsibility (CSR). In the short term, firms with good CSR performance suffer smaller market penalties upon the revelation of financial wrongdoing, supporting the buffer effect, as opposed to the backfire effect, of a good social image. We also find that the misbehaving firms’ post‐misconduct CSR efforts are negatively associated with delisting probabilities, and positively with stock returns. These findings support the argument that increasing post‐crisis CSR engagement can be an effective remedy for a damaged reputation.     

Reputation repair and corporate donations: An investigation of responses to regulatory penalties

According to the risk management and reputation insurance theory of corporate social responsibility, corporate donations can help a company to repair its reputation after a crisis. This study uses a propensity score matching–difference in difference (PSM + DID) methodology to investigate the charitable donation activities of companies that have been subject to regulatory penalties. The analysis of a sample of A-share listed companies in the 2004–2016 period shows that companies significantly increase their charitable donations after regulatory penalties, but this effect weakens over time. Further analysis reveals that non-state-owned companies, companies with higher ownership concentrations, and companies receiving severer penalties are more motivated to make donations after regulatory penalties. By studying the reputation repair behavior of companies that have been subject to regulatory penalties, this study offers further support for the risk management and reputation insurance theory of corporate social responsibility. It also enriches our understanding of companies’ active responses to regulatory penalties and provides insights into companies’ motives for making charitable donations.     

Social impact disclosure and corporate annual reports

Corporate Social Responsibility may be clarified by utilizing the economic concept of externalities. The line-by-line prose in annual reports throws some light on the intensity and nature of these activities. Two independent tests support the concept that annual reports may for some purposes be considered a reasonable surrogate for real activity. Annual reports from eighty-two food-processing corporations are used as a data base to illuminate corporate social responsibility activities, as well as the nature of current disclosure patterns.     

企业社会责任:“真心”抑或“幌子”?——基于高管内幕交易视角的研究

企业承担社会责任究竟是“真心”还是“幌子”?与现有研究聚焦于考察社会责任对企业行为的影响不同,本文基于高管个体行为视角,实证检验企业社会责任对高管个体证券交易行为的影响。基于2008～2014年中国沪深A股上市公司高管10338个内幕交易样本的实证结果显示:(1)企业承担社会责任不仅能抑制高管内幕交易的规模,更能显著降低高管内幕交易获利性,这表明作为社会责任的谋划者,企业高管并未以社会责任为“幌子”牟取个人证券交易的私利,在一定程度上提供了企业“真心”承担社会责任的证据;(2)进一步从“信息模型”和“声誉模型”双重视角探究发现,在企业信息不透明和高管个人声誉较差的情况下,企业社会责任对高管内幕交易获利性的抑制作用更为显著;并且相较于高管个人声誉较差的情况,企业社会责任在信息不透明的情况下对高管内幕交易获利性的抑制作用更强。总之,本研究从高管个体行为视角提供了企业社会责任具有积极治理作用的证据,不仅丰富了企业承担社会责任经济后果的研究,同时,对利益相关者也具有实践指导意义。     

企业社会责任:“真心”抑或“幌子”?——基于高管内幕交易视角的研究

企业承担社会责任究竟是“真心”还是“幌子”?与现有研究聚焦于考察社会责任对企业行为的影响不同,本文基于高管个体行为视角,实证检验企业社会责任对高管个体证券交易行为的影响。基于2008～2014年中国沪深A股上市公司高管10338个内幕交易样本的实证结果显示:(1)企业承担社会责任不仅能抑制高管内幕交易的规模,更能显著降低高管内幕交易获利性,这表明作为社会责任的谋划者,企业高管并未以社会责任为“幌子”牟取个人证券交易的私利,在一定程度上提供了企业“真心”承担社会责任的证据;(2)进一步从“信息模型”和“声誉模型”双重视角探究发现,在企业信息不透明和高管个人声誉较差的情况下,企业社会责任对高管内幕交易获利性的抑制作用更为显著;并且相较于高管个人声誉较差的情况,企业社会责任在信息不透明的情况下对高管内幕交易获利性的抑制作用更强。总之,本研究从高管个体行为视角提供了企业社会责任具有积极治理作用的证据,不仅丰富了企业承担社会责任经济后果的研究,同时,对利益相关者也具有实践指导意义。     

The use of Web sites as a disclosure platform for corporate performance

Adopting a stockholders' interests' perspective, we explore three related questions: (1) What are the scope and patterns of corporate performance disclosure on the Internet? (2) What are the determinants of the extent and scope of corporate performance disclosure on the Internet? (3) Is corporate performance disclosure on the Internet relevant for valuation of a firm's earnings? Corporate performance disclosure relates to corporate actions and initiatives that directly affect society and, ultimately, stockholders' wealth. We focus on Web (HTML) disclosure. Our sample comprises Canada's largest publicly-traded firms, many of which are also SEC registrants. The extent and scope of web disclosure by these firms is rated using a coding grid. Regarding the first question, three disclosure patterns emerge: (1) firms providing disclosure about innovation, development and growth also tend to report about customer value as well as maintaining a Web site with good capabilities (business-related disclosure), (2) disclosure about human/intellectual capital is linked to social responsibility disclosure (social-related disclosure) and, (3) the disclosure of financial performance and corporate governance practices are both closely linked together (financial-related disclosure). Regarding the second question, firms apparently take into account variables proxying for information costs and benefits accruing to stockholders when determining the extent of their Web disclosure. Finally, regarding the third question, a firm's web-based performance disclosure appears to affect its earnings valuation multiple, although in a differential manner according to the nature of the information being conveyed.     

How does customer motivational orientation affect satisfaction?

This study examines the link between customer motivational orientation and customer satisfaction in the Chinese context. The customer motivational orientation–satisfaction model was tested on 349 Chinese bank customers in Macao, China. Results of structural equation modelling indicated that task-oriented and interaction-oriented customers were not equally responsive to the financial services provided. Specifically, task motivational orientation was directly and indirectly related to customer satisfaction through customer perceived service quality, whereas interaction motivational orientation only linked to customer satisfaction through customer perceived service quality as a mediator. The theoretical and practical implications of the findings are discussed.     

Determinants and consequences of voluntary corporate social responsibility disclosure: Evidence from private firms

We examine whether and how private firms differ from public firms in determining corporate social responsibility (CSR) disclosure policies. We document that private firms are less likely to issue CSR reports compared with their public peers. Adopting a bivariate probit model that accommodates partial observability, we find that the effect is mainly driven by a supply-side force rather than a demand-side force. From a debtholder-oriented perspective, while public firms enjoy more favorable credit ratings and a lower cost of debt due to CSR disclosure, private firms do not reap similar benefits from CSR disclosure. Corporate governance and CSR assurance alleviate debtholders' concern on private firms’ engagements in CSR.     

Stakeholders and the stock price crash risk: What matters in corporate social performance?

This study provides evidence for the differential impacts of corporate social responsibility (CSR) initiatives targeting different stakeholder groups on stock price crash risk. In particular, it highlights CSR's role in mitigating risk and creating shareholder value. Our results reveal that managerial bad news hoarding and the resultant stock crashes are largely determined by the social CSR dimension, and this effect is predominantly seen in undervalued firms. Moreover, social CSR subcategories aimed at specific stakeholder groups (such as the community, employees, or customers) tend to mitigate future crashes. In contrast, firms' environmental initiatives and governance characteristics seem to have trivial effects on stock crashes. Using a quasi-natural experiment, we find that the mitigating effect of social CSR dimension on crash risk is likely to be causal.     

Accounting and corporate accountability

The rationale for and techniques of social responsibility accounting are examined analytically. The fear that corporate managers might act contrary to the interests of shareholders and not be concerned with those with whom the corporation contracts (creditors, workers and consumers) is not supported. But others may be harmed by corporate actions (externalities). The ways in which social responsibility accounting can be used to measure and serve as a means of controlling externalities are delineated, analyzed and rejected.     

Customer retention and cross-buying in the banking industry: An integration of service attributes,satisfaction and trust

Most previous studies have focused on customer retention and have ignored the importance of customers’ cross-buying behaviour. Customer retention seems to be the result of a kind of repetitive decision by the customers, but their decision to cross-buy involves a more complicated process. In this study, the authors examine the effects of locational convenience, one-stop shopping convenience, firm reputation, firm expertise, and direct mailings on both customer retention and cross-buying. The mediating roles of satisfaction and trust in the relationships between service attributes, customer retention, and cross-buying are also examined. The results indicate that banks can use different service attributes to influence customer retention and cross-buying. Trust and satisfaction play different mediating roles in the relationships between service attributes, customer retention, and cross-buying.     

Social responsibility and corporate reputation: The case of the Arthur Andersen Enron audit failure

We examine the influence of social responsibility ratings on market returns to Arthur Andersen (AA) clients following the Enron audit failure. Chaney and Philipich (2002) found that AA’s loss of reputation resulted in negative market returns to AA clients following the Enron audit failure. Proponents of social responsibility argue that social responsibility can improve the reputation of the firm, while detractors argue that social responsibility expenditures are a poor use of shareholder money. If social responsibility sends a signal to investors regarding the reputation/ethics of management, social responsibility could mitigate the negative returns to AA clients following the Enron audit failure. Using a matched sample of AA and non-AA firms, we do not find evidence that social responsibility mitigated the negative returns to AA clients following the Enron audit failure. Our results are inconsistent with claims that social responsibility can burnish a firm’s reputation in a time of crisis and with prior research indicating a positive relationship between social responsibility and market value.     

Customer satisfaction with socially responsible investing initiatives: The influence of perceived financial and non-financial quality

During the last decade, socially responsible investment (SRI) initiatives have grown to become a mainstream financial service in many countries. However, to date, only a few studies focus on understanding the final investor of such initiatives. This article focuses on one particularly overlooked aspect of SRI behavior; that of customer post-purchase satisfaction. A theoretical model of satisfaction with SRI-profiled mutual funds is developed and tested. The results indicate that perceived financial performance of the SRI-profiled mutual fund is the most important predictor of customer satisfaction. However, perceived environmental, social and governance (ESG) performance also had a positive impact on satisfaction for the SRI mutual fund. On the basis of these results, it is argued that although ESG quality is important to customers, marketers of SRI initiatives should primarily focus on the conventional quality attributes such as financial performance, as a good ESG record alone is unlikely to generate customer satisfaction.     

The impact of community expectations on corporate community involvement disclosures in the UK

Despite increase mistrust between corporations and societies in the aftermath of the global corporate misbehaviours, the literature examining the impact of community concerns on corporate communications is undeveloped. Our paper is timely; it contributes to the literature on corporate social responsibility (CSR) by considering the impacts of community expectations on Corporate Community Involvement Disclosures (CCID) using a ten-year panel study. We advance CSR communication research by providing a fresh theoretical perspective – media-agenda-setting theory – to the broad CSR debate and the CCID subset of this debate. Our findings support the media-agenda theoretical expectation and provide important practice and policy recommendations for improving interactions between corporations and their communities.     

Does corporate social responsibility protect shareholder value from the shock of COVID-19? Evidence from China

Our study examines whether and how increased engagement in social responsibility activities by a firm affects movements in its stock prices during the COVID-19 public health crisis, which is regarded as an exogenous shock to economic ties between focal firms and their customers, employees, and suppliers. We find that corporate social responsibility has an inverted U-shaped relationship with shareholder value. The nonlinear relationship is more dominant at firms with higher cash-flow constraints and weaker cost-adjustment capabilities. Our research also generates meaningful implications for business practices.