The initial stock market reaction to a product‐harm crisis is an important factor motivating firms to engage in corporate social responsibility (CSR). By analyzing event data on product‐harm crises in Chinese listed companies spanning from 2009 to 2019, we uncover evidence that crisis‐related abnormal returns have a significant negative association with the subsequent growth of CSR. Importantly, we find that this negative relationship is especially pronounced for firms that have a greater need to restore moral legitimacy, such as those receiving high levels of media favorability and positive analyst recommendations. These findings offer novel insights into the motivations behind firms' increased investment in CSR following product‐harm crises from a legitimacy perspective.
{"title":"The use of corporate social responsibility in response to product‐harm crisis: How do stock market reactions matter?","authors":"Zhe Ouyang, Xiaojiao Wang, Yang Liu","doi":"10.1002/csr.2739","DOIUrl":"https://doi.org/10.1002/csr.2739","url":null,"abstract":"The initial stock market reaction to a product‐harm crisis is an important factor motivating firms to engage in corporate social responsibility (CSR). By analyzing event data on product‐harm crises in Chinese listed companies spanning from 2009 to 2019, we uncover evidence that crisis‐related abnormal returns have a significant negative association with the subsequent growth of CSR. Importantly, we find that this negative relationship is especially pronounced for firms that have a greater need to restore moral legitimacy, such as those receiving high levels of media favorability and positive analyst recommendations. These findings offer novel insights into the motivations behind firms' increased investment in CSR following product‐harm crises from a legitimacy perspective.","PeriodicalId":505003,"journal":{"name":"Corporate Social Responsibility and Environmental Management","volume":"52 7","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139845061","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}
Hui Xia, Shixian Ling, Z. Liu, Sirimon Treepongkaruna
Theoretical theories underpin the governance effect of directors' and officers' (D&O) liability insurance include agency costs and stakeholder interests. Motivated by mixed evidence on the corporate governance effects of D&O, we ask whether and how the directors' and officers' (D&O) liability insurance affects corporate social responsibility (CSR) performance in China, one of the largest and fastest growing economies in the world. We develop two contrasting hypotheses: (1) supervision and incentives versus (2) opportunism. To test these hypotheses, we rely on Chinese A‐share market data and fixed effect panel regressions, along with a battery of robustness checks, including Heckman sample selection bias, two‐stage least square instrumental variable (2SLS‐IV), difference‐in‐difference (DiD), propensity score matching (PSM) analyses. Consistent with supervision and incentives hypotheses and stakeholder theory, we find that D&O liability insurance significantly increases firm's CSR performance and firms renewing D&O liability insurance with the same insurers tend to have better CSR performance. Two possible mechanisms supporting this positive relation between D&O liability insurance and CSR performance are information transparency and accounting conservatism. Aside from theoretical contributions, our findings offer important practical contributions such as promoting D&O as external governance and ensuring the functions of D&O insurance comprehensively and correctly understood. Integrating D&O insurance with CSR can be viewed as an important business strategy by mitigating risks, enhancing reputation, ensuring legal compliance, and supporting responsible decision‐making.
{"title":"Corporate governance and corporate social responsibility: Evidence from directors' and officers' liability insurance","authors":"Hui Xia, Shixian Ling, Z. Liu, Sirimon Treepongkaruna","doi":"10.1002/csr.2732","DOIUrl":"https://doi.org/10.1002/csr.2732","url":null,"abstract":"Theoretical theories underpin the governance effect of directors' and officers' (D&O) liability insurance include agency costs and stakeholder interests. Motivated by mixed evidence on the corporate governance effects of D&O, we ask whether and how the directors' and officers' (D&O) liability insurance affects corporate social responsibility (CSR) performance in China, one of the largest and fastest growing economies in the world. We develop two contrasting hypotheses: (1) supervision and incentives versus (2) opportunism. To test these hypotheses, we rely on Chinese A‐share market data and fixed effect panel regressions, along with a battery of robustness checks, including Heckman sample selection bias, two‐stage least square instrumental variable (2SLS‐IV), difference‐in‐difference (DiD), propensity score matching (PSM) analyses. Consistent with supervision and incentives hypotheses and stakeholder theory, we find that D&O liability insurance significantly increases firm's CSR performance and firms renewing D&O liability insurance with the same insurers tend to have better CSR performance. Two possible mechanisms supporting this positive relation between D&O liability insurance and CSR performance are information transparency and accounting conservatism. Aside from theoretical contributions, our findings offer important practical contributions such as promoting D&O as external governance and ensuring the functions of D&O insurance comprehensively and correctly understood. Integrating D&O insurance with CSR can be viewed as an important business strategy by mitigating risks, enhancing reputation, ensuring legal compliance, and supporting responsible decision‐making.","PeriodicalId":505003,"journal":{"name":"Corporate Social Responsibility and Environmental Management","volume":" 28","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139790738","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}
We propose that quality of corporate social responsibility (CSR) reports, as measured by independent agencies, will decline when firms perform well in social responsibility. Building on the existing literature on stakeholder theory and existing literature, we theorize that lower‐quality CSR reports may correlate with better actual CSR because performing well in CSR will increase external stakeholders' expectations but simultaneously stimulate discontent among shareholders, forcing firms to mitigate the conflict through CSR reports. This study takes Chinese listed firms from 2010 to 2019 as subjects and examines the relationship between winning prestigious CSR awards and CSR report quality. The results support our hypothesis. We further investigate two moderator variables and find the negative relationship is weakened when firms are state‐owned, potentially resulting in more social expectation pressures from the government and public. As an important financial indicator tracked by internal stakeholders, return on equity weakens this negative relationship.
{"title":"Happy troubles? CSR awards and CSR report quality","authors":"Yihao Guo, Yanwen Song, Yimin Wang","doi":"10.1002/csr.2720","DOIUrl":"https://doi.org/10.1002/csr.2720","url":null,"abstract":"We propose that quality of corporate social responsibility (CSR) reports, as measured by independent agencies, will decline when firms perform well in social responsibility. Building on the existing literature on stakeholder theory and existing literature, we theorize that lower‐quality CSR reports may correlate with better actual CSR because performing well in CSR will increase external stakeholders' expectations but simultaneously stimulate discontent among shareholders, forcing firms to mitigate the conflict through CSR reports. This study takes Chinese listed firms from 2010 to 2019 as subjects and examines the relationship between winning prestigious CSR awards and CSR report quality. The results support our hypothesis. We further investigate two moderator variables and find the negative relationship is weakened when firms are state‐owned, potentially resulting in more social expectation pressures from the government and public. As an important financial indicator tracked by internal stakeholders, return on equity weakens this negative relationship.","PeriodicalId":505003,"journal":{"name":"Corporate Social Responsibility and Environmental Management","volume":" 66","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139793221","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}
Ji Li, Tao Liu, Linping Dong, Guoxin Li, Zhenyao Cai
We adopt a meta‐analytic approach to study the relationship between gender‐related institutional environments/logics at both organizational level and societal level on the one hand and gender heterogeneities in individual prosocial behaviors on the other. Analyzing data from 138 empirical studies covering 35 countries, we obtain evidence of gender heterogeneity in prosocial behaviors under different gender‐related institutional environments/logics. Our meta‐analysis helps obtain several important findings. For instance, a gender gap in pro‐environmental behaviors is more likely to be observed in societies/countries with low gender egalitarianism with women showing less prosocial behavior than their men counterparts. Moreover, women under the same institutional environments also show significantly more anti‐corruption behaviors than do their men counterparts, while this difference is much smaller (i.e., with smaller effect size) given the institutions of high gender egalitarianism. We conclude with a discussion of the implications of the findings for academic research and managerial practice.
{"title":"Gender‐related institutional environments, gender pay gap/equality and prosocial behaviors: A cross‐national meta‐analysis","authors":"Ji Li, Tao Liu, Linping Dong, Guoxin Li, Zhenyao Cai","doi":"10.1002/csr.2728","DOIUrl":"https://doi.org/10.1002/csr.2728","url":null,"abstract":"We adopt a meta‐analytic approach to study the relationship between gender‐related institutional environments/logics at both organizational level and societal level on the one hand and gender heterogeneities in individual prosocial behaviors on the other. Analyzing data from 138 empirical studies covering 35 countries, we obtain evidence of gender heterogeneity in prosocial behaviors under different gender‐related institutional environments/logics. Our meta‐analysis helps obtain several important findings. For instance, a gender gap in pro‐environmental behaviors is more likely to be observed in societies/countries with low gender egalitarianism with women showing less prosocial behavior than their men counterparts. Moreover, women under the same institutional environments also show significantly more anti‐corruption behaviors than do their men counterparts, while this difference is much smaller (i.e., with smaller effect size) given the institutions of high gender egalitarianism. We conclude with a discussion of the implications of the findings for academic research and managerial practice.","PeriodicalId":505003,"journal":{"name":"Corporate Social Responsibility and Environmental Management","volume":"33 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139796963","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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