Taking sides: Corporate social responsibility and political ideology

Abstract

In the United States and other countries, large private firms are increasingly more likely to take public political stances on controversial issues. Firms behave as ideological actors when they take sides in large public debates on social and economic issues. These stances may involve public speech, changes in the terms of service, or in internal reorganization and intrafirm actions. Despite the increase in firms' political actions, firms' ideological orientations remain unexamined. To answer this question, we collect corporate social responsibility statements from Fortune 1000 firms. Using semisupervised topic models, we identify topics that reflect stances on environmental and social issues. We then examine if firms are more likely to take stances on political issues due to pragmatic or ideological factors. We find that while pragmatic considerations play a role, firms' political stances are more driven by the ideological orientation of employees and managers. This research contributes a novel measure of firm ideology and sheds new light on the determinants of corporate political activity.