Pub Date : 2017-10-24DOI: 10.16980/JITC.13.5.201710.109
Taewoo Roh
Corporate Survival (CS) is subject to a variety of factors. According to previous studies on strategic management, the major factors that affect CS are diversification, innovation, first-mover advantage, and corporate governance structure. This study uses the resource-based view and the institutional theory as the theoretical grounds for the justification of CS, and suggests that slack resources and corporate giving are valid factors that affect CS. The hypothesis that integrates above two theories suggests that the impacts of these two elements are jointly harmonized to complement each other. To verify the mediation effect of slack resources and corporate giving on CS, the model was estimated with a survival analysis of 479 companies listed in 2000, the year from which the Korean economy began to recover after the onset of the IMF financial crisis in 1997. The results confirmed the direct effect of slack resource and mediation of corporate giving on CS. The supplementary analysis delineated how CS can be changed in accordance with firm age and slack resources.
{"title":"Does Doing Good Make a Firm Live Longer?: A Study on Slack Resources, Corporate Giving, and Corporate Survival","authors":"Taewoo Roh","doi":"10.16980/JITC.13.5.201710.109","DOIUrl":"https://doi.org/10.16980/JITC.13.5.201710.109","url":null,"abstract":"Corporate Survival (CS) is subject to a variety of factors. According to previous studies on strategic management, the major factors that affect CS are diversification, innovation, first-mover advantage, and corporate governance structure. This study uses the resource-based view and the institutional theory as the theoretical grounds for the justification of CS, and suggests that slack resources and corporate giving are valid factors that affect CS. The hypothesis that integrates above two theories suggests that the impacts of these two elements are jointly harmonized to complement each other. To verify the mediation effect of slack resources and corporate giving on CS, the model was estimated with a survival analysis of 479 companies listed in 2000, the year from which the Korean economy began to recover after the onset of the IMF financial crisis in 1997. The results confirmed the direct effect of slack resource and mediation of corporate giving on CS. The supplementary analysis delineated how CS can be changed in accordance with firm age and slack resources.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123754406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Manapon Limkriangkrai, SzeKee Koh, Robert B. Durand
This study investigates the independent effects of environmental (E), social (S), corporate governance (G), and the composite ESG ratings on stock returns and corporate financing decisions of the largest stocks in the Australian equity market. Firms with high composite ESG ratings tend to increase their leverage. For the individual ratings, we find different inferences: firms with low E and high G ratings tend to raise less debt. Firms with high G ratings hold less cash, while those with low G ratings have lower dividend payouts. S ratings have no impact on corporate financing decisions. There appears to be no significant difference in risk-adjusted returns for portfolios based on ESG ratings, effectively indicating that there is no cost of ESG investment.
{"title":"Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy: Australian Evidence","authors":"Manapon Limkriangkrai, SzeKee Koh, Robert B. Durand","doi":"10.1111/irfi.12101","DOIUrl":"https://doi.org/10.1111/irfi.12101","url":null,"abstract":"This study investigates the independent effects of environmental (E), social (S), corporate governance (G), and the composite ESG ratings on stock returns and corporate financing decisions of the largest stocks in the Australian equity market. Firms with high composite ESG ratings tend to increase their leverage. For the individual ratings, we find different inferences: firms with low E and high G ratings tend to raise less debt. Firms with high G ratings hold less cash, while those with low G ratings have lower dividend payouts. S ratings have no impact on corporate financing decisions. There appears to be no significant difference in risk-adjusted returns for portfolios based on ESG ratings, effectively indicating that there is no cost of ESG investment.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"126 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117390264","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
According to scholars and organizations that focus on the performance of organizations in the nonprofit sector, retaining loyal and engaged donors has been a critical component of sustainability. Through the conceptual lens of single- and double-loop learning and organizational communications theory, this single-case study explored donor communication strategies used by 3 executive-level leaders of a nonprofit organization in Minneapolis, Minnesota. Data collected from semistructured interviews, organizational documents, and Guidestar, an online information service specializing in reporting on U.S. nonprofit companies, were manually coded and thematically analyzed. Two key themes emerged: effective processes for donor communication strategy development and organizational learning strategy development. Strategy development may assist this Minneapolis company’s organizational leaders with improving retention of donors and participants in the company’s programs and services, increasing action plan completion rates, and integrating the lessons learned process during the development and implementation of communication strategies to increase donor retention. By bridging the gap between performance arts and social responsibility, this company’s leaders may engage both donors and participants, resulting in favorable retention rates. These findings have implications for positive social change. Nonprofit leaders’ models of effective communications strategies and processes to improve participant and donor engagement may ensure leaders’ ability to serve and improve their communities by engaging at-risk youth in programs designed to develop performance arts and leadership skills.
{"title":"Communication Strategies as Drivers of Nonprofit Donor Retention","authors":"Tammy Jameson","doi":"10.2139/SSRN.3096453","DOIUrl":"https://doi.org/10.2139/SSRN.3096453","url":null,"abstract":"According to scholars and organizations that focus on the performance of organizations in the nonprofit sector, retaining loyal and engaged donors has been a critical component of sustainability. Through the conceptual lens of single- and double-loop learning and organizational communications theory, this single-case study explored donor communication strategies used by 3 executive-level leaders of a nonprofit organization in Minneapolis, Minnesota. Data collected from semistructured interviews, organizational documents, and Guidestar, an online information service specializing in reporting on U.S. nonprofit companies, were manually coded and thematically analyzed. Two key themes emerged: effective processes for donor communication strategy development and organizational learning strategy development. Strategy development may assist this Minneapolis company’s organizational leaders with improving retention of donors and participants in the company’s programs and services, increasing action plan completion rates, and integrating the lessons learned process during the development and implementation of communication strategies to increase donor retention. By bridging the gap between performance arts and social responsibility, this company’s leaders may engage both donors and participants, resulting in favorable retention rates. These findings have implications for positive social change. Nonprofit leaders’ models of effective communications strategies and processes to improve participant and donor engagement may ensure leaders’ ability to serve and improve their communities by engaging at-risk youth in programs designed to develop performance arts and leadership skills.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"323 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116687666","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-02-17DOI: 10.16980/JITC.13.1.201702.69
Mudzingiri Enestiaa, Hyun-Chae Park, Negero, Y. Tesfaye
This study investigated the relationship between corporate social responsibility activities (economic, legal, ethical and philanthropic components) and brand attitude for Korean firms in African countries. The study was done in Zimbabwe and Ethiopia. The research survey collected 190 data points with 173 validated questionnaires. Using Structural Equation Model (SEM), the data was analyzed. The results show that only the economic components of Corporate Social Responsibility (CSR) were positively related to brand attitude. The legal components and ethical components of CSR were not related to brand attitude. Contrary to expectation, the philanthropic components were not significantly related to brand attitude. Therefore, this study suggested that business firms from Korea should focus on the economic components of CSR to increase their foothold in Africa. Thus, firms undertaking the economic components of CSR activities could positively influence consumer brand attitude.
{"title":"What Types of CSR Activities Will Be Most Feasible for Korean Firms in African Countries?: The Case of Ethiopia and Zimbabwe","authors":"Mudzingiri Enestiaa, Hyun-Chae Park, Negero, Y. Tesfaye","doi":"10.16980/JITC.13.1.201702.69","DOIUrl":"https://doi.org/10.16980/JITC.13.1.201702.69","url":null,"abstract":"This study investigated the relationship between corporate social responsibility activities (economic, legal, ethical and philanthropic components) and brand attitude for Korean firms in African countries. The study was done in Zimbabwe and Ethiopia. The research survey collected 190 data points with 173 validated questionnaires. Using Structural Equation Model (SEM), the data was analyzed. The results show that only the economic components of Corporate Social Responsibility (CSR) were positively related to brand attitude. The legal components and ethical components of CSR were not related to brand attitude. Contrary to expectation, the philanthropic components were not significantly related to brand attitude. Therefore, this study suggested that business firms from Korea should focus on the economic components of CSR to increase their foothold in Africa. Thus, firms undertaking the economic components of CSR activities could positively influence consumer brand attitude.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115689807","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The idea that companies service a wide range of stakeholders dates back to the 19th Century but has gained increasing traction in more recent times. The question is what to do where the corporate sector fails to keep pace with societal expectations. The response of the Indian government was to make it mandatory for large corporations to spend funds on corporate social responsible (CSR) activities. In this paper, we investigate the success of this legislation both for the companies and the intended beneficiaries. We find that the impact of the legislation has fallen short of expectations both in terms of the volume of CSR expenditure generated and the activities to which it has been directed. In particular, we find that the legislation has had a negative effect on the relationship between CSR and profitability which in turn can have a perverse effect on the willingness of companies to spend in this area. We conclude that greater care has to be taken when implementing mandatory CSR if it is to be effective.
{"title":"Mandatory Corporate Social Responsibility: The India Experience","authors":"R. Bird, A. Mukherjee, G. Duppati","doi":"10.2139/ssrn.2898552","DOIUrl":"https://doi.org/10.2139/ssrn.2898552","url":null,"abstract":"The idea that companies service a wide range of stakeholders dates back to the 19th Century but has gained increasing traction in more recent times. The question is what to do where the corporate sector fails to keep pace with societal expectations. The response of the Indian government was to make it mandatory for large corporations to spend funds on corporate social responsible (CSR) activities. In this paper, we investigate the success of this legislation both for the companies and the intended beneficiaries. We find that the impact of the legislation has fallen short of expectations both in terms of the volume of CSR expenditure generated and the activities to which it has been directed. In particular, we find that the legislation has had a negative effect on the relationship between CSR and profitability which in turn can have a perverse effect on the willingness of companies to spend in this area. We conclude that greater care has to be taken when implementing mandatory CSR if it is to be effective.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130858298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Состояние общества, развивающиеся процессы и зарегистрированные результаты доказывают, что продолжает усугублятьсядефицит эффективного контроля во всех социально-значимых сферах. Аналитики и эксперты, показывают, что причины являются политическими, социальными и экономическими, но не указывают выхода из ситуации. Именно это является поводом для создания этой разработки, в которой в центре внимания находится один иной вид контроля. Основная цель, которая раскрывает содержание, сводится к ознакомлению с сущностью характера управленческого контроля. Из-за того, что именно этот управленческий контроль является видом контроля эклектичного характера и в нем проявляются черты различных основных видов контроля и форм задач, решение которых связано с его концептуальной сущностью, которая предопределяет и развивает его способности. Процесс анализа имеет специфический характер, потому что его реализация показывает не просто выводы и результаты, а дает объективную картину, до какой степени многообразные проявления управленческого контроля могут быть развиты и совершенствованы. Развитие упомянутой тенденции дает ответ на вопрос, который задает общество - может ли сама концепция быть основой для создания единых организационных, а почему бы не и государственных, систем управленческого контроля. English Abstract: The condition of society, the processes in progress and the registered results prove that the deficit of effective control in all socially significant spheres goes deeper. Analyzers and experts uncover that the causes are political, social and economic but that does not show way out of the situation. This is the reason for the elaboration of the present work, where the focus of consideration is put on a different kind of control. The main goal that reveals the contents is the acquaintance with the essential characteristic of managerial control. Because of the fact that namely that managerial control is a controlling type of eclectic nature and it reveals features of various basic control types and forms, the tasks that are solved, are engaged with its conceptual essence, which preconditions and develops its capacity. The process of analysis has specific character because its realization reveals not only findings and results but gives objective notion to the extent to which various managerial control acts could be developed and improved. The progress of the mentioned trend gives answer to the question society asks – could the concept itself be basis for establishing unified organizational, why not state systems for managerial control.
{"title":"Концептуальные Основы Управленческого Контроля – Анализ и Совершенствование (Conceptual Grounds of Managerial Control – Analysis and Improvement)","authors":"Venelin Terziev, E. Stoyanov, Nikolay Nichev","doi":"10.2139/ssrn.3129684","DOIUrl":"https://doi.org/10.2139/ssrn.3129684","url":null,"abstract":"<b>Russian Abstract:</b> Состояние общества, развивающиеся процессы и зарегистрированные результаты доказывают, что продолжает усугублятьсядефицит эффективного контроля во всех социально-значимых сферах. Аналитики и эксперты, показывают, что причины являются политическими, социальными и экономическими, но не указывают выхода из ситуации. Именно это является поводом для создания этой разработки, в которой в центре внимания находится один иной вид контроля. Основная цель, которая раскрывает содержание, сводится к ознакомлению с сущностью характера управленческого контроля. Из-за того, что именно этот управленческий контроль является видом контроля эклектичного характера и в нем проявляются черты различных основных видов контроля и форм задач, решение которых связано с его концептуальной сущностью, которая предопределяет и развивает его способности. Процесс анализа имеет специфический характер, потому что его реализация показывает не просто выводы и результаты, а дает объективную картину, до какой степени многообразные проявления управленческого контроля могут быть развиты и совершенствованы. Развитие упомянутой тенденции дает ответ на вопрос, который задает общество - может ли сама концепция быть основой для создания единых организационных, а почему бы не и государственных, систем управленческого контроля. <b>English Abstract:</b> The condition of society, the processes in progress and the registered results prove that the deficit of effective control in all socially significant spheres goes deeper. Analyzers and experts uncover that the causes are political, social and economic but that does not show way out of the situation. This is the reason for the elaboration of the present work, where the focus of consideration is put on a different kind of control. The main goal that reveals the contents is the acquaintance with the essential characteristic of managerial control. Because of the fact that namely that managerial control is a controlling type of eclectic nature and it reveals features of various basic control types and forms, the tasks that are solved, are engaged with its conceptual essence, which preconditions and develops its capacity. The process of analysis has specific character because its realization reveals not only findings and results but gives objective notion to the extent to which various managerial control acts could be developed and improved. The progress of the mentioned trend gives answer to the question society asks – could the concept itself be basis for establishing unified organizational, why not state systems for managerial control.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"93 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132988324","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the concept of compliance risk in the European insurance industry. In the absence of a common definition and subsequent blurred perimeter at European and national level, I propose a shared definition and a clear indication on which risks have to be included under the umbrella of the compliance risk. I approach the topic via a survey extended to insurance companies based in Germany and Austria by posing a set of questions on the perception, materiality, approaches, models and foreseen evolution on the compliance risk. Within the limitation of the approach and of the sample, the survey spots the lower priority assigned by the companies to the compliance risk in the year of enforcement of Solvency II and the subsequent initial stage of evolution of the models and the approaches in place to manage it. The survey allows inferring a clear and shared definition of the compliance risk among the insurers and provides valuable indication for setting its perimeter.
{"title":"Compliance Risk in the European Insurance Industry: Setting a Common Playing Field","authors":"M. Sottocornola","doi":"10.2139/ssrn.2876186","DOIUrl":"https://doi.org/10.2139/ssrn.2876186","url":null,"abstract":"This paper investigates the concept of compliance risk in the European insurance industry. In the absence of a common definition and subsequent blurred perimeter at European and national level, I propose a shared definition and a clear indication on which risks have to be included under the umbrella of the compliance risk. I approach the topic via a survey extended to insurance companies based in Germany and Austria by posing a set of questions on the perception, materiality, approaches, models and foreseen evolution on the compliance risk. Within the limitation of the approach and of the sample, the survey spots the lower priority assigned by the companies to the compliance risk in the year of enforcement of Solvency II and the subsequent initial stage of evolution of the models and the approaches in place to manage it. The survey allows inferring a clear and shared definition of the compliance risk among the insurers and provides valuable indication for setting its perimeter.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"73 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117093090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the deterrence of governmental environmental regulation from the perspective of peer effect. With the financial data of listed companies and firm-level penalties manually collected in the period between 2007 and 2015, the Heckman model is adopted to test the deterrence from the target firms to peer firms, the empirical results show that government environmental regulation has deterrent effect, increasing the environmental protection investment of penalized firms and the peer firms. Considering the characteristics of target penalized firms and the penalty, when the target penalized firm is of big size, severely punished or reported, the deterrence effect to peer firms is much stronger. Specially, the industry competition can strengthen the deterrence effect. Therefore, the government should improve the certainty, typicality and severity of punishments, strengthen the informal supervision institution, such as public opinion, in the implementation of environmental regulation, and market-oriented reforms in China can strengthen the effectiveness of environmental regulation via competition.
{"title":"The Deterrence Effect of the Environmental Regulation: The Influence of the Penalized Firms on Peer Firms’ Environmental Investment Decision","authors":"Wang Yun, Yanxi Li, Zhuang Ma, Jinbo Song","doi":"10.2139/ssrn.2873299","DOIUrl":"https://doi.org/10.2139/ssrn.2873299","url":null,"abstract":"This paper studies the deterrence of governmental environmental regulation from the perspective of peer effect. With the financial data of listed companies and firm-level penalties manually collected in the period between 2007 and 2015, the Heckman model is adopted to test the deterrence from the target firms to peer firms, the empirical results show that government environmental regulation has deterrent effect, increasing the environmental protection investment of penalized firms and the peer firms. Considering the characteristics of target penalized firms and the penalty, when the target penalized firm is of big size, severely punished or reported, the deterrence effect to peer firms is much stronger. Specially, the industry competition can strengthen the deterrence effect. Therefore, the government should improve the certainty, typicality and severity of punishments, strengthen the informal supervision institution, such as public opinion, in the implementation of environmental regulation, and market-oriented reforms in China can strengthen the effectiveness of environmental regulation via competition.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"282 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121334188","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article presents a new dataset of allegations of corporate human rights abuse in Latin America from 2000-2014. The dataset responds to growing interest in the role of businesses in human rights violations, accountability processes for corporate abuses, and possible remedies for victims. It is the first dataset of its kind that offers a tool for analyzing five types of allegations of corporate human rights abuse (physical violence, development and poverty, health, environment, and labor) and judicial or non-judicial remedy mechanisms associated with each allegation. Initial analysis of the data shows results that defy assumptions in the existing literature regarding which sectors are most likely to be targeted in allegations of abuse, who makes claims against companies, and the outcomes of those claims for victims of abuse.
{"title":"Allegations of Corporate Human Rights Abuse in Latin America, 2000-2014: Insights from a New Dataset","authors":"Laura Bernal-Bermúdez, Tricia D. Olsen, L. Payne","doi":"10.2139/ssrn.2851171","DOIUrl":"https://doi.org/10.2139/ssrn.2851171","url":null,"abstract":"This article presents a new dataset of allegations of corporate human rights abuse in Latin America from 2000-2014. The dataset responds to growing interest in the role of businesses in human rights violations, accountability processes for corporate abuses, and possible remedies for victims. It is the first dataset of its kind that offers a tool for analyzing five types of allegations of corporate human rights abuse (physical violence, development and poverty, health, environment, and labor) and judicial or non-judicial remedy mechanisms associated with each allegation. Initial analysis of the data shows results that defy assumptions in the existing literature regarding which sectors are most likely to be targeted in allegations of abuse, who makes claims against companies, and the outcomes of those claims for victims of abuse.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114209671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents a theory of the market for activism where citizens fund activists, campaigning activists pressure firms to change their practices, and firms self-regulate to forestall or mitigate campaigns. Activists have leverage because firms must self-regulate before they are targeted, and their self-regulation must deter the activists conditional on being targeted. Activists anticipate gaining more from campaigns against soft (more vulnerable) firms than hard (less vulnerable) firms, so it is more costly for soft firms to forestall the activists, and some risk a campaign but self-regulate to mitigate the probability that the campaign succeeds. Campaigns thus can occur in equilibrium. The threat from activism is the probability that a firm is targeted, and the stronger the threat the fewer campaigns there are because more firms self-regulate to forestall a campaign. Radical activists target harder firms than do moderate activists, and the more radical the activists the more costly it is to forestall them. Some firms are too hard to be threatened by activism and maximize their profits. Firms that are too hard to target directly may be vulnerable to campaigns threatening their supply and distribution chains. Activists and their donors have an incentive to maximize the scope of activism; that is, the breadth of the threat from activism.
{"title":"Self‐Regulation and the Market for Activism","authors":"D. Baron","doi":"10.1111/jems.12162","DOIUrl":"https://doi.org/10.1111/jems.12162","url":null,"abstract":"This paper presents a theory of the market for activism where citizens fund activists, campaigning activists pressure firms to change their practices, and firms self-regulate to forestall or mitigate campaigns. Activists have leverage because firms must self-regulate before they are targeted, and their self-regulation must deter the activists conditional on being targeted. Activists anticipate gaining more from campaigns against soft (more vulnerable) firms than hard (less vulnerable) firms, so it is more costly for soft firms to forestall the activists, and some risk a campaign but self-regulate to mitigate the probability that the campaign succeeds. Campaigns thus can occur in equilibrium. The threat from activism is the probability that a firm is targeted, and the stronger the threat the fewer campaigns there are because more firms self-regulate to forestall a campaign. Radical activists target harder firms than do moderate activists, and the more radical the activists the more costly it is to forestall them. Some firms are too hard to be threatened by activism and maximize their profits. Firms that are too hard to target directly may be vulnerable to campaigns threatening their supply and distribution chains. Activists and their donors have an incentive to maximize the scope of activism; that is, the breadth of the threat from activism.","PeriodicalId":245576,"journal":{"name":"CSR & Management Practice eJournal","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"118245121","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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