Showing papers in "Social Responsibility Journal in 2017"

How does corporate social responsibility create customer loyalty? The role of corporate image

Abstract: This paper aims to investigate whether corporate image has a mediating effect on the influence of corporate social responsibility (CSR) on customer loyalty in independent hotels.,Data were collected from customers of five-star hotels located in Istanbul in Turkey. The theoretical model was tested with 404 usable data. The results were analyzed by using structural equation modeling (SEM).,Findings show that CSR creates customer loyalty partially through corporate image in the independent hotels. In addition, it was found that the hotels included in the study carried out moderate level of CSR activities.,The research model was tested in independent five-star hotels. Further studies could be carried out using different independent hospitality companies. In addition, the research was conducted on a limited sample, as hotel managers were not willing to allow direct contact with customers. Further studies could be carried out on larger samples.,This study recommends that independent hotels carry out more CSR activities on social and environmental issues. In addition, direct effect of CSR on customer loyalty is lower than its indirect effect via corporate image. Therefore, if companies desire to create customer loyalty through CSR, they should introduce their CSR activities to customers via communication tools (website, media etc.),This study examines CSR in terms of sustainable development in the independent hotels. Furthermore, it explains relationships between CSR and corporate image and customer loyalty through the principle of generalized reciprocity specified in the theory of social change.

Exploring the mediating role of intellectual capital and competitive advantage on the relation between CSR and financial performance in SMEs

Abstract: Purpose The relationship between corporate social responsibility (CSR) and financial performance (FP) is a much-researched topic in academic arena. Recent studies disclosed that intellectual capital (IC) significantly impacts the success and survival of organizations. Moreover, theoretical assertions confirm that competitive advantage (CA) mediates the association between IC and FP. This has opened up new dimensions for the study. Therefore, this study aims to develop a theoretical model, first, to specify these relations and, second, to explore the mediating role of IC and CA on the relation between CSR and FP in the context of small- and medium-sized enterprises (SMEs). Design/methodology/approach Hypotheses are tested through a survey conducted on 384 SMEs in Rajasthan state. A structured questionnaire having 38 variables was used, and collected data are subjected to confirmatory factor analysis. Structural equation modeling was used to validate the measurement model and to test the mediating effect. Findings The findings indicate a weak positive relation between CSR and FP. The empirical data provide supportive evidence that IC has a profound impact on CSR and FP relationship. Specifically, it was noticed that the mediating role of CA on this relationship was not as reflective as described in the literature. Research limitations/implications The limitation of this study is that it is limited to one country, more specific to one geographical area of a country; therefore, findings of the study cannot be generalized in terms of its implications to other regions and countries. Originality/value Very few empirical studies have analyzed the mediating role of IC and CA on the relationship between CSR and FP. This study is expected to enable scholars and practitioners to have a more definite and direct understanding of the implication of IC and CA in association between CSR and FP.

Corporate social responsibility and firm’s performance: empirical evidence

Abstract: Purpose The concept of corporate social responsibility (CSR) has emerged over the past 30 years to occupy a significant role in certain aspects of the organizational theory. The purpose of this paper is to examine the impact of CSR and firm’s operational competitive performance in terms of cost, quality, flexibility and delivery, as well as the overall performance, from a developing country’s environment. Design/methodology/approach Structural equation modeling was used to study the relationship between CSR, competitive operational capabilities and the overall organizational performance using a survey of informants. Findings Using data from firms in Ghana, the work demonstrates that CSR initiative by firms will have a positive relationship with firm’s operational competitive performance in terms of cost, quality, flexibility and delivery performance, as well as overall performance. Furthermore, the study demonstrates that competitive operational capabilities in terms of cost and flexibility will lead to firms’ overall performance from the Ghanaian business environment, whereas delivery and quality seems to have no positive effect on overall performance. Research limitations/implications The results indicate the relevance and the implications of CSR initiatives on firms’ performance in a developing country such as Ghana. Specifically, the results indicate that when organizations invest in CSR initiatives, they are likely to achieve cost reductions, improved quality, flexibility, improved delivery and overall performance. Practical implications The research shows how CSR initiatives can enhance firm’s operational competitive performance and overall performance. Originality/value The work illustrates and provides some insights and builds on the literature in the area of CSR in a developing country’s environment.

Corporate governance: evidence from Islamic banks

Abstract: This paper aims to examine the impact of Shari’ah supervisory boards (SSBs) on the performance of Islamic banks (IBs). It also tests whether SSBs’ attributes affect the performance of IBs. Based on a sample of 1,803 Islamic bank-year observations from 82 banks in 15 countries over the period 1993-2014 and controlling for factors known to affect bank performance, this study reveals a robust and significant positive relationship between SSBs and Islamic bank performance. This study also shows that the characteristics of SSBs affect the performance of IBs. This research reveals how SSBs influence the performance of IBs, as well as the processes and roles SSBs use to ensure Shari’ah compliance in business transactions.,The purpose of this study design is to relate SSB presence, size and diversity to financial performance using three techniques. The first technique is a multivariate data analysis that analyzes data arising from more than one variable. The second technique is a clustered regression (clustering by bank), which corrects for serial correlation and produces unbiased t-statistics. Because this sample is drawn from panel data, it is expected serial autocorrelation of the independent variables and error term within banks. In cases where within-company correlation exists, t-statistics based on average regression coefficients from year-by-year regression are upwardly biased and potentially severe (Peterson, 2009). Therefore, this study uses a technique that agrees with Stock and Watson (2002), who show that the standard method of calculating heteroskedasticity-robust standard errors for the fixed-effects estimator generates inconsistent variance estimates. Thus, using the clustered regression is consistent with the fixed-effects estimator. The third technique is a two-stage least-squares regression that helps build an instrumental variable for robustness tests purposes.,The findings suggest that large corporate boards and large SSBs are more efficient in dealing with different monitoring and advisory roles than small SSBs. Consequently, this suggests that increasing the size of corporate boards and SSBs should improve monitoring and advisory functions, management behavior and organizational performance.,It is possible that there is an upper limit to this benefit, however; we do not explore this limit, which therefore provides opportunities for additional research. Because Shari’ah compliance relates only to a rational legal framework of negative screening relegated to interest prohibition and limiting uncertainty. The interest prohibition and limiting uncertainty have not been investigated between the two samples due to data unavailability. In addition, limited accounting-based measures of financial performance may not accurately portray IB performance; hence, an additional market measure is implemented, which is Tobin’s Q.,Ultimately, these findings could help IBs improve their financial results by enhancing their internal and external governance mechanisms (Walsh and Seward, 1990). They provide a basis for developing larger, more diverse SSBs that are more focused on complying with Shari’ah and corporate governance. The results also have significant policy implications for improving firm-level corporate governance versus improving country-level institutional factors. Both views have their advocates. However, it is very difficult to reform the legal system in a short time. Still, this study shows that struggling IBs have a way to improve their corporate governance and simultaneously improve their financing environment.,This research contributes to the literature on the effects of SSBs on IBs’ organizational financial performance, processes and roles. It is the first to examine empirically the underpinnings of how SSBs affect organizational financial performance via agency theory and contingency theory.

Integrated reports: disclosure level and explanatory factors

Abstract: Purpose This paper aims to look into the new corporate reporting phenomenon, the so-called integrated reporting (IR), so as to assess the information level provided, identify trends and explore its determining factors. Design/methodology/approach This study looks into the IR disclosure level of the annual reports published by 91 companies in the International Integrated Reporting Council (IIRC)’s pilot programme. The authors’ empirical research focuses on four areas: the guiding principles of connectivity and materiality, as well as two content elements: the business model and governance. Following extant research on voluntary disclosure, a disclosure index is proposed and some hypotheses are put forward on its connection with some corporate variables. Findings The results point out that the disclosure levels of the IRs published by IIRC’s pilot programme members reach medium levels of disclosure. According to the authors’ index, the level of disclosure is significantly associated with the specific environment of organizations (i.e. region and industry), assurance of the report and publication in the IIRC website. Originality/value This study makes a relevant contribution, as it presents an innovative IR disclosure index and sheds some light on the disclosure practices of early adopters of IR. This evidence is valuable in understanding the trends in this field and could help the IIRC and other standard setters with a view to improving sustainable development and reporting.

Corporate social performance and cost of debt: the relationship

Abstract: Purpose This paper aims to investigate the link between corporate social performance (CSP) and cost of debt financing. Despite academic debate has focused on the link between corporate social responsibility (CSR) and CSP (expressed through accounting and market measures of profitability), few empirical researches have analysed the relations between CSR, cost of debt and its relation with the risk profile of a firm. The literature on the cost of debt determinants generally documents a negative association between measures of the risk of the firm and its cost of debt. The literature on CSR defines risk reduction as one of the potential benefits related to CSR activities. Thus, the expectation is that high CSP scores are inversely related to cost of debt. Design/methodology/approach Using a unique data set of 332 firms over a time period of five years antecedent to the global financial crisis, a linear regression model is applied. Findings The results show a positive relation between CSP and cost of debt, demonstrating that CSR is not a value driver with an impact on the firm’s risk profile. Practical implications The research has also practical implications as it makes managers aware of the potentiality of CSP to reduce the firm’s cost of debt. Originality/value These findings enlarge the empirical research on the value of CSP, expanding it towards a quite new area of investigation: the cost of external financing.

Corporate social responsibility and employee engagement: can CSR help in redressing the engagement gap?

Abstract: Purpose This paper aims to examine the influence of employees’ corporate social responsibility (CSR) perceptions on their engagement level at work. In addition, the study looks into the contingencies of the relationship by proposing and examining gender as moderator of the proposed relationship. Design/methodology/approach The study sample consisted of 187 business professionals from both public and private sector manufacturing and service firms operating in India. The study uses a non-experimental correlational field study design. The data were collected with the help of self-administered questionnaires via both personal visits to the organizations and internet-based questionnaire using snowball sampling. Hierarchical linear regression analysis was used to test the study hypotheses. Findings The study results clearly underscore the potential of firm’s involvement in CSR activities in influencing the employee attitude and behaviour at work. However, the study findings failed to show any significant effect of interaction between CSR and gender on employee engagement. Practical implications Given the positive association of CSR with employee engagement irrespective of gender differences as reflected in the study results, CSR can actually be used across the organizations as tool for talent management. Originality/value The study bridges the macro-micro divide and addresses to the need for micro level research in CSR stream by examining the influence of CSR perceptions on work engagement level of employees. The study advances existing body of knowledge beyond developed Western economies by exploring the strategic value of CSR in India, which presents a unique cultural context to look at.

Green information technology adoption: influencing factors and extension of theory of planned behavior

Abstract: Purpose The effect of global warming on our environment has shifted the focus to green technologies worldwide. Subsequently, multiple research studies have attempted to assess awareness around the concept of “Green IT” in different countries. This paper aims to examine the factors that affect the intention to use green information technology (IT) (INT) and their subsequent influence on the actual use of green IT (ACT) among students in the context of a developing country. Design/methodology/approach The data were collected using survey questionnaires administered to six public university students. A total of 633 valid questionnaires were received and analyzed using structural equation modeling. Findings A positive relationship of INT with attitude toward green IT, subjective norms toward green IT, perceived behavioral control toward green IT, consideration of future consequences and openness was found, and also, a positive relationship between INT and ACT was found. Originality/value Many of prior research focused on factors influencing green IT adoption and usage from the organizational point of view, and there is not much literature dedicated to the study of IT users’ belief and behavior about green IT. Moreover, most studies tend to focus on developed nations, while a lesser number of studies gave consideration to developing nations. This study proposes a research framework that incorporated two personality trait factors to the theory of planned behavior to investigate individual factors influencing INT among students in the context of a developing country.

Sustainability reports in Brazil through the lens of signaling, legitimacy and stakeholder theories

Abstract: Purpose The purpose of this paper is to extend the applicability of stakeholder, legitimacy and signaling theories by examining to what extent proactive corporate social responsibility disclosures are interrelated to attempt to gain and maintain legitimacy, to gain support of the stakeholders and to reduce information asymmetry. Design/methodology/approach To test the theoretical arguments, a longitudinal approach over a five-year period of 145 companies’ sustainability reports and statistical analysis was applied to investigate the evolution of their quality. Findings The results show a significant increase in the quality of sustainability reporting, and the experience gained while writing these reports can contribute to this. Based on signaling and legitimacy theories, this paper suggests that improvement in sustainability reporting quality acts as an important signal to gain legitimacy in case of information asymmetry during the legitimacy process. Th disclosure for economic and social dimensions is better than that of the environmental dimension, and the improvement in quality over time is the because of synergies and interlinkages more between these two dimensions of sustainability, and to a lesser extent because of the environmental dimension. Practical implications Firms should view investing in sustainability reporting disclosure as a strategy for obtaining business legitimacy. Originality/value The results of this paper are of interest for several reasons: extend and broaden the use of signaling in studying its use on sustainability reporting; the use of three theories is an appropriate framework for empirical analysis of sustainability reporting disclosure quality in Brazil; and add to the scarce evidence of sustainability reporting in Brazil.

Corporate social responsibility disclosures in Malaysia: evidence from large companies

Abstract: Purpose The purpose of this study is to examine whether there is any improvement in the extent and quality of corporate social responsibility disclosures (CSRD) in Malaysia between 2011 and 2014 and to determine the factors that influence the extent and quality of CSRD in these two years. Also, this study examines the methods of disclosures and the items that largest Malaysian companies addressed. Design/methodology/approach A self-constructed CSR is utilised to measure the extent and quality of CSRD in the annual reports of the top 71 Malaysian companies listed in Bursa Malaysia for the years 2011 and 2014. Multiple regressions along with their associated toolkits for data verification and diagnostic tests are used to assess the improvement in CSRD between 2011 and 2014 and the factors that affect CSRD. Findings Results show a slight increase in the extent and quality of CSRD between 2011 and 2014. With regards to the factors influencing CSRD, only awards are found to be significant in determining the extent and quality of CSRD either in 2011 or in 2014. Board size, ownership concentration, independent non-executives and return on assets influence both the extent and quality of CSRD in 2011. Director ownership and firm size determine the extent and quality of CSRD in 2014. Government ownership only influences the extent of CSRD in 2011. Research limitations/implications Some traditional limitations are found to be considered in future research, such as the use of annual reports as the only source of CSRD information. Results support the legitimacy theory that assumes that Malaysian companies disclose CSR information as a reflection of the incidents that happen in that environment of the firm without ignoring the role of the government in pushing those companies towards being socially responsible by issuing regulations, or in motivating those companies by introducing awards and giving fiscal facilities. Practical implications The results help the policymakers to introduce more awards in some domains that were less addressed by Malaysian companies and also to examine the causes behind the non-influence of the new Malaysian Code on Corporate Governance (MCCG 2012) on CSRD. Originality/value The study can be considered as one of the limited empirical studies that assess the changes in CSRD before and after the issuance of MCCG 2012 in Malaysia.

Determinants of CSR disclosure of Tunisian listed banks: a multi-support analysis

Abstract: This study aims to investigate the extent and trends of voluntary corporate social responsibility (CSR) disclosure and to analyze the determinants of the listed banks’ annual reports and websites in an emergent capital market, namely, Tunisia.,The authors examine the level of CSR disclosure by means of a manual content analysis where the sentence is used as the unit of the analysis. They use Branco and Rodrigues’ (2006 and 2008) index which includes 23 items. They focus on the annual reports of 11 Tunisian listed banks during the period from 2007 to 2012 and the information presented on their websites in December 2013. They use, also, regression analysis to identify the determinants of CSR disclosure used by Tunisian listed banks.,The results of the investigation show that Tunisian listed banks disclose CSR information primarily in a narrative form. Human resources are the main focus in the annual reports, whereas, on the websites, community involvement is the most widespread theme. With regard to the determinants, it appears that bank age, financial performance and state shareholding are the main factors that impact CSR disclosure in the Tunisian listed banks’ annual reports. Furthermore, this study finds a positive (negative) relationship between leverage (financial performance) and CSR disclosure in the banks’ websites. In this regard, the results show different determinants of CSR disclosure for the two supports. Moreover, bank size, foreign shareholding and the type of auditor are unrelated to the listed banks’ CSR disclosure either in their annual reports or on their websites.,The sample size is small; however, it consists of all the relevant Tunisian banks. Also, this study is subject to the limitations of using manual content analysis.,This study enables highlights the importance of CSR disclosure and its determinants for the Tunisian banks’ stakeholders (such as regulators, investors and managers).,The authors contribute to the scarce literature on CSR disclosure in financial institutions. It is the first study to investigate Tunisian listed banks’ CSR disclosure. It is a first attempt to show, also, how banks’ characteristics and banks’ ownership structures impact on their CSR disclosure in their annual reports and on their websites.

Corporate environmental responsibility and financial performance: does bidirectional causality work? Empirical evidence from the manufacturing industry

Abstract: Purpose Over the past two decades, scholarly attention has focused mainly on a direct and inverse relationship between corporate environmental responsibility (CER) and corporate financial performance (CFP). This study aims to explore the bidirectional causality hypothesis, as good environmental results can lead to good financial results, which makes it possible to invest more resources in projects that improve environmental performance. Design/methodology/approach The authors test the bidirectional causality between CER and CFP on a sample of listed Italian manufacturing firms over the 2005-2014 period. The authors use a fixed effect panel data regression and check the robustness of the results with alternative econometric techniques. Findings Although the findings do not support bidirectional hypothesis, they establish direction/causality from CFP to CER. As a result, environmental responsibility is a consequence of prior financial performance, which supports the slack resources hypothesis. Research limitations/implications Given that companies’ environmental commitment is dictated by economic evaluations or by assessing the availability of resources to invest, it seems that the spread of environmentally responsible behaviours might be supported by different external pressures. Originality/value The paper provides further insights on sustainability management literature by establishing a bidirectional relationship between firm performance and environmental responsibility.

An investigation of the effects of corporate social responsibility on corporate reputation and customer loyalty – evidence from the Taiwan non-life insurance industry

Abstract: Purpose Corporate social responsibility (CSR) has gradually come to be regarded as a strategic business tool, and has a significant influence on consumers’ behaviours, but few studies discuss CSR regarding consumers’ behaviour in the insurance industry. The purpose of this paper is to investigate the effects of CSR on corporate reputation and customer loyalty. Design/methodology/approach This paper used a survey to assess consumers’ perception regarding CSR activities from non-life insurance industries. The questionnaires were administered to consumers who have purchased insurance in Taiwan. The survey questions were tested through an exploratory factor analysis. An analysis of variance and multiple regressions were performed to test the hypotheses. Findings The empirical results demonstrate that CSR activities have significantly positive influences on corporate reputation and customer loyalty. Additionally, CSR activities also have significantly positive influences on brand image. Furthermore, the study indicates the mediating role of brand image on CSR, corporate reputation and customer loyalty. Originality/value This paper establishes the mediating role of brand image among CSR, corporate reputation and customer loyalty for non-life insurance industries. Additionally, the empirical results focus on analysing the impact of CSR on customer’s behaviour, and strongly encourage insurers to continue investing; CSR and brand image can be strategic marketing tools and promote the sustainable development of insurance.

Women in the boardroom and their impact on climate change related disclosure

Abstract: This paper aims to investigate the relationship between gender diversity and the Carbon Disclosure Project (CDP) score/index. Specifically, the study describes extant research on theoretical perspectives, and the impact of women on corporate boards (WOBs) on carbon emission issues in the global perspective.,This study uses the carbon disclosure scores of the CDP from 2011 to 2013 (inclusive). A total observation for the three-year periods is 1,175 companies. However, based on data availability for the model, the sample size totals 331 companies in 33 countries with firms in 12 geographical locations. The authors used a model which is estimated using the fixed-effects estimator.,The outcomes of the study reveal that there is a positive relationship between gender diversity (WOB) and carbon disclosure information. In addition to establishing a relationship between CDP score and other control variables, this study also found a relationship with Board size, asset size, energy consumption and Tobin’s Q, which is common in the existing literature.,The limitations of the study mostly revolve around samples and the time period. To further test the generalizability and cross-sectional validity of the outcomes, it is suggested that the proposed framework be tested in more socially responsible firms.,There are increasing pressures for WOBs from diverse stakeholders, such as the European Commission, national governments, politicians, employer lobby groups, shareholders, Fortune and Financial Times Stock Exchange (FTSE) rankings and best places for women to work lists. The study offers insights to policy makers implementing gender quota legislation.,The study has important implications for putting into practice good corporate governance and, in particular, gender diversity. The outcomes of the analyses advocate that companies that included women directors and had a smaller board size may expect to achieve a higher level of carbon emission performance and to voluntarily disclose the level of carbon information assessment requested by the CDP.

Finance or philanthropy? Exploring the motivations and criteria of impact investors

Abstract: The growing prevalence of social entrepreneurship has been coupled with an increasing number of so-called “impact investors”. However, much remains to be learned about this nascent class of investors. To address the dearth of scholarly attention to impact investing, this study seeks to answer four questions that are central to understanding the phenomenon. What are the defining characteristics of impact investing? Do impact investors differ from traditional classes of investors and, if so, how? What are the motivations that drive impact investment? And, what criteria do impact investors use when evaluating potential investments?,A partially inductive study based on semi-structured interviews with 31 investors and ethnographic observation was conducted to explore how impact investors differ from other classes of investors in their motivations and unique criteria used to evaluate ventures seeking investment.,This study reveals that impact investors represent a unique class of investors that differs from socially responsible investing, from other types of for-profit investors, such as venture capitalists and angel investors, and from traditional philanthropists. The varied motivations of impact investors and the criteria they use to evaluate investments are identified.,Despite the growing practitioner and media attention to impact investing, several foundational issues remain unaddressed. This study takes the first steps toward shedding light on this new realm of early-stage venture investing and clarifying its role in larger efforts of social responsibility.

Corporate social responsibility, visibility, reputation and financial performance: empirical analysis on the moderating and mediating variables from Korea

Abstract: Purpose This paper aims to substantiate the mechanism through which corporate social responsibility (CSR) affects financial performance (FP). Specifically, this paper focuses on the moderating effect of visibility and mediating effect of reputation in the relationship. Design/methodology/approach This paper investigates 175 Korean firms from 2010 to 2012 that have been listed in the Korean Economic Justice Index for all three years. The hypotheses are tested using various measures of visibility and the Korea’s Most Admired Company index as proxy for reputation. The logistics regression and the ordinary least square are used. Findings This paper initially demonstrates that the visibility moderates the correlation between CSR and reputation. On this finding, it further proves that CSR has positive effect on the long-run FP, measured in the Tobin’s Q, both directly and indirectly through reputation. However, the influence is irrelevant in the short run. In sum, visibility moderates the correlation between CSR and reputation, which mediates the CSR-FP relationship in the long run. Practical implications This paper argues for the importance of visibility in practicing CSR, especially when reputation building and financial benefit is sought through CSR. Originality/value Despite its strategic importance, the visibility of CSR has not been sufficiently studied. Moreover, as scholars have recently suggested that the CSR–FP relationship is rather indirect, there is even more significance in investigating the moderating and mediating variable. Hence, with the intuitive results, this paper lays an integral foundation in the literature.

Transformational leadership and affective organizational commitment: mediating roles of perceived social responsibility and organizational identification

Abstract: The purpose of this research was to examine the mediating roles of staff-level employee perceptions of corporate social responsibility (PCSR) and organizational identification in the relationship between transformational leadership and affective organizational commitment.,A survey was administered to staff-level employees of private sector companies through social media groups comprising members of the alumni associations of two universities in the northeast of America. A total of 218 responses were received, and the data were analyzed using a serial multiple mediator model.,The research indicates that transformational leadership helps staff-level employees perceive the organization as socially considerate, which in turn adds to their feelings of identification and commitment to the organization. Perceived corporate social responsibility and organizational identification do mediate the relationship between transformational leadership and affective organizational commitment. Leader development programs should consider emphasizing transformational leadership to achieve a win for both organizations and society.,This study adds empirical evidence to understand the linkage between transformational leadership and PCSR in staff-level employees. The research provides insight into how leaders can be responsive to stakeholder demands through transformational leadership, how PCSR is engendered at the staff-level, how staff-level employee PCSR contributes organizational value and how PSCR and organizational identification partly explain how transformational leadership effects affective organizational commitment.

Financial and non-financial determinants of corporate social responsibility: empirical evidence from Pakistan

Abstract: The purpose of this research study is to lower the knowledge gap by exploring the degree of corporate social responsibility disclosures (CSRD) made by top Pakistani (Karachi Stock Exchange [KSE] 100 listed non-financial) companies and investigating the financial and non-financial CSRD determinants which aid to the policy development in implementing required regulatory reforms.,KSE 100 index listed companies are covered in this study that published their annual reports consistently during the time period of five years from 2009 to 2013. Financial and non-financial data will be collected from the sample of KSE-listed company’s annual reports. Information related to corporate social responsibility (CSR) will be collected by hand from reports of disclosure of CSR, disclosures of corporate governance, report of the directors, a statement of Chairman’s and notes to the financial statement enclosed in companies’ annual reports. Content analysis technique to measure corporate environmental and social disclosures for items scoring the approach is, in essence, dichotomous, one score assigned to the item in the scores of instrument of research if it disclosed, otherwise assigned zero, and no penalty or negative score is imposed to the item which is reflected irrelevant.,Family ownership, industry type and firm size have positive significant relationship with CSR disclosure, and the authors found negative significant relationship between risk and CSRD. Results of this study propose that, in developing countries like Pakistan, the extent of determinant of CSRD is based on the number of important firm and industry characteristics and are aligned with empirical evidence.,This research uses only annual reports of the companies for the data of CSRD but companies also use other sources for disclosure of their CSR information such as mass media, etc. Content analysis is performed by one author and the second author cross-checked the companies, so biasness may remain a limitation due to the fact that errors attach in rating scale due to judgments of human.,The finding of this study helps policymakers to quantify and know the degree of CSRD and its determinants which enables them to boost the organizational legitimacy and CSR practices by adopting the needed regulatory reform.,The results of this study provide warning signals to the management of the companies in some cases where disclosure level of CSR is lower in the period before issuance of SECP CSR guidelines of 2013.,This research study offers valuable inputs in the development and betterment of CSR rules for the reason that the findings of the research provide information to the future CSR rules and guidelines. The results of this study also help the regulator (SECP) in Pakistan to revise the CSRD to align with the need of changing industrial characteristics and economic environment.

How CSR and overall service quality lead to affective commitment: mediating role of company reputation

Abstract: Purpose The paper aims to focus on the relationships among corporate social responsibility (CSR), overall service quality (OSQ), company reputation and affective commitment. It investigates whether service quality or CSR is the primer driver of affective commitment. Also, the mediating role of company reputation was examined. Design/methodology/approach Structural equation modelling analysis provided support for the hypotheses from a sample of 522 retail banking consumers in Turkey. Findings Findings show that both CSR and OSQ influence affective commitment through the mediator role of company reputation. Originality/value This study tests and confirms that corporate reputation plays a mediator role along the paths from CSR and OSQ to affective commitment. Also, this study expands the traditional view of CSR’s and OSQ effect on customers and suggests that CSR and OSQ do affect not only company reputation but also affective commitment.

CSR and cost of capital: evidence from Japan

Abstract: Purpose This study aims to examine the link between corporate social performance (CSP) and the cost of capital of Japanese firms in 2008-2013, considering the influences of banking relationships and ownership structure. Design/methodology/approach It examines the relation between CSP and the cost of capital in terms of the cost of debt, cost of equity and weighted average cost of capital, using a composite CSP measure based on stakeholder relationships. A regression model is adopted, controlling for bank dependency, ownership structure and firm-specific attributes. Findings Institutional ownership influences the CSP–cost of equity relation and reduces the cost of equity, while CSP is perceived by debtors as not information-mitigating for the observed period. For 2008-2010, the relation between CSP and bank dependency increases the cost of debt; however, the positive influence of bank dependency on the cost of debt dilutes during 2010-2013 as the shift to a more market-oriented financial market in Japan occurs. Practical implications Although bank borrowing is important, especially for small firms, non-financial disclosure makes external financing more flexible. Institutional investors concerned about the non-financial aspects of business, therefore, play an important role in mitigating the information asymmetry that exists in the capital market. Originality/value This study extends research on the CSP–cost of capital link by considering structural changes in financial systems (e.g. capital market perception of CSP and banks as delegated monitors).

Corporate social responsibility and corporate fraud

Abstract: Purpose This study aims to examine the impact of corporate culture, measured by corporate social responsibility (CSR), on the likelihood and severity of corporate fraud. CSR literature indicates that corporate managers are moral actors and are obliged to exercise their discretionary decisions according to their moral standards. Based on the moral development theory, this study argues that higher managers’ ethical values reflected by higher CSR activities are less likely to commit fraud and have lower severity of fraud. Design/methodology/approach This study argues that at the firm level, corporate culture can be measured by firms’ CSR activities. Using probit, match-pair, propensity matching and Heckman regressions on a sample of 152 criminal corporate fraud cases in the USA from the US Department of Justice (DOJ) during 2000 and 2010, this study empirically examines the impact of CSR, CSR strengths and concerns scores on the likelihood and the severity of corporate fraud. Findings Firms with higher CSR and CSR strengths (concerns) scores have lower (higher) likelihood and lower (higher) severity of corporate fraud. This study finds that firms with higher community, employee, environment and product-related CSR have lower likelihood of fraud, and firms with higher diversity, employee, environment and product-related CSR have lower fraud severity. Practical implications Establishing a positive corporate ethical culture is essential to curb the outbreak of corporate fraud that threatens our societal norms. The findings also shed some light for investors, corporate board of directors and regulators to consider CSR as a reflection of top managers’ moral values that is negatively related to the occurrence and severity of corporate fraud. Social implications Strengthening moral values among top executives and employees in corporations by encouraging CSR activities aid our society to alleviate future outbreak of epidemic problem for corporate fraud. Originality/value This study brings a new perspective that there is a relationship between corporate ethical culture within an organization, measured by CSR activities, and corporate fraud based on the cognitive moral development theory in organization.

The effect of equity and bond issues on sustainability disclosure. Family vs non-family Italian firms

Abstract: Purpose This paper aims to study firms’ attitudes toward using sustainability reporting for facilitating raising external capital and the effect of the ultimate controlling owner on disclosure. Design/methodology/approach A disclosure index is constructed on the basis of sustainability reports, for a sample of 230 Italian listed firms. Empirical analysis is based on panel data models. Findings Firms are more prone to disclose when they are planning to issue equity/bonds. Family control does not affect disclosure in the case of bond issues, but it has a moderating effect in the case of equity issuance. A family CEO, increasing the family’s sense of identification with the business, improves disclosure. Research limitations/implications Family ownership is the most viable measure to assess its socioemotional wealth (SEW). This assesses only the dimension related to family control and influence but it does not take into account other aspects of SEW. This study focuses on the relationship between disclosure and financing choices; it does not analyze the relationship between disclosure and success of equity/bond issues. Practical implications Family firms should improve their sustainability reporting, especially for firms operating in environmentally sensitive industries. Sustainability reports could play an effective role as a control mechanism in a firm’s behavior toward the environment, society, its employees and consumers. Originality/value The paper contributes to the studies on sustainability, showing that the nature of ultimate controlling owners and firms’ financing decisions affect disclosure. Moreover, it contributes to family firms’ literature, shedding light on the effect of the family control and sense of identification with the firm on disclosure.

The value relevance of environmental performance: evidence from Indonesia

Abstract: Purpose This paper aims to extend previous developed market-based research on the value relevance of environmental performance by testing the relationship between share prices of Indonesian-listed corporations and their environmental performance ratings. Design/methodology/approach The sample consists of 60 listed firms which are rated by the Indonesia Ministry of Environment between 2002 and 2012, resulting in a sample of 246 observations. The Ohlson (1995) model was utilized and modified by including environmental ratings. Findings The research finds that superior environmental performance is associated with higher share price, whereas inferior environmental performance is value irrelevant to the market. Research limitations/implications Considering the significance of PROPER, this research did not observe other types of corporate environmental performance, such as those released by the press and reported in the company annual reports and websites. These limitations are not controlled for in the tests, and this might confound inferences. Originality/value The paper addresses a gap in the literature by providing insight on how a developing capital market values both superior and inferior environmental performance. It also provides implication on the effectiveness of environmental monitoring policy in providing incentives for firms to improve their environmental performance

Commitment in corporate social responsibility and financial performance: a study in the Tunisian context

Abstract: Purpose The purpose of this study is to measure the impact of commitment in corporate social responsibility (CSR) in its various forms (CSR philanthropy/ altruism, CSR integration and CSR innovation) on the financial performance as measured by certain ratios. Design/methodology/approach Thus, on the basis of a theoretically constructed questionnaire administered to 82 responsibles (general managers, human resources managers and CSR responsibles) operating in four business areas, the authors have developed the extent of the overall CSR commitment and the extent of commitment by CSR action type. Findings The examination of the impact of the CSR commitment on the financial performance has partially approved the social impact assumption. Indeed, only the positive effect of CSR philanthropy is demonstrated. Otherwise, for integrated and innovative actions, the low involvement in these actions in relation to philanthropic ones could explain the lack of significant association. But this result is also important, as it marks the lack of any negative effects. Even if they do not result in a better financial performance, these commitments do not bring harm to the firm. As for the strategic approach predominance on the altruistic approach, this hypothesis is checked only in the case of firms operating in the chemical sector. Research limitations/implications The main limitation of the study is the limited size of the total sample and the sample by industry, so the authors expect a larger sample might be able to provide more meaningful results. Practical implications Then, the study suggests the importance of implementing real CSR strategies for firms that often find doubt and ambiguity when they decide to undertake social actions. However, these results do not mean that companies must refrain from driving altruistic or philanthropic activities but are encouraged to seek a social performance that suits a certain level of integration and innovation. Social implications The most important of all the above is that the negative impact of social actions is not verified in any way, allowing to state that the social actions do not exert a negative effect on the financial performance. So, participation in social problems do not bring harm to the firm. Originality/value The originality of this work comes from: the measure of CSR commitment, and the use of a classification typology of CSR actions in terms of their interaction with the core of the firm’s business as developed by Halme (2009). In fact, based on a theoretically constructed questionnaire, the authors have developed two measures of responsible commitment (level of commitment and intensity of commitment) of some industrial Tunisian firms.

What drives employees to participate in corporate volunteering programs

Abstract: Purpose The purpose of this paper is to examine how some of the key aspects of employee motivation and their perception of volunteering programs impact their participation in corporate volunteering. Specifically, this study argues that employee’s self-oriented motives to significantly influence employee participation than other-oriented motives. Similarly, this study also hypothesized that the corporate volunteering program characteristics to significantly relate to employee participation in corporate volunteering. Design/methodology/approach The data were collected from 461 employee volunteers representing various industries across four different locations in India. A self-reported method was used to collect the data by administering the questionnaires. Findings The structural equation modeling results indicate that other-oriented motives (altruistic) and characteristics of corporate volunteering programs to significantly predict employee participation in corporate volunteering and self-oriented motives did not show significance in predicting employee participation. Research limitations/implications Results suggest that employee participation in volunteering is a function of not merely employee motivation but also how the volunteering programs are conceptualized and implemented. Originality/value This research study moves beyond mere role of employee motives analysis and considered the role of characteristics of corporate volunteering programs to impact employee volunteering behavior. Further, it highlights there is a differential impact of self- and other-oriented motives in predicting employee participation.

Sustainability KPIs for integrated reporting

Abstract: The framework of the International Integrated Reporting Council (IIRC) is principles-based and does not provide specific key performance indicators (KPIs) for integrated thinking and reporting. Therefore, the purpose of this paper is to propose KPIs for integrated reporting which decipher a firm’s sustainability through empirical analysis.,As a proxy of firms’ sustainability, the authors focus on firms that have survived for more than 100 years and that have already achieved sustainability, and analyze these firms to reveal the financial features that distinguish sustainable firms from the other firms.,The study found two distinguishing facts: the value added that is distributed to stakeholders other than shareholders is significantly larger, and the stability of profitability and the profitability itself are significantly higher in sustainable firms.,The study proposes a value-added distribution and the stability of profitability as sustainability KPIs for integrated reporting.,First, this study provides the first evidence that value added distribution and the stability of profitability distinguish a firm’s sustainability. Second, it provides a new perspective in the search for sustainability KPIs. Third, as the empirical data consist of all listed firms in 136 countries, the results should be robust and general.

CSR practices, ISO 26000 and performance among Malaysian automotive suppliers

Abstract: Purpose The purpose of this study is to examine the relationship between corporate social responsibility (CSR) practices, ISO 26000 and corporate social responsibility performance (CSRP) among Malaysian automotive suppliers. Design/methodology/approach For this research purpose, 400 questionnaires were given simultaneously to each Proton and Perodua automotive supplier by the researcher. In all, 288 sets of questionnaire were successfully collected, which showed a 72 per cent response rate for the 400 questionnaires distributed to Proton and Perodua automotive suppliers. In this study, the structural equation modeling (SEM) technique was utilized to perform the required statistical analysis of the data survey. To test the reliability and validity of the instruments, exploratory factor analysis, reliability analysis and confirmatory factor analysis were performed. Findings The findings indicate that the relationship between CSR practices and CSRP was positive and significant, and the relationship between CSR practices and ISO 26000 was also positive and significant. ISO 26000 has a direct positive and significant relationship with CSRP. Therefore, ISO 26000 mediates the relationship between CSR practices and CSRP. The results indicate that ISO 26000 could be considered as a partial mediator. Therefore, the impact of implementation of CSR practices on performance increases with ISO 26000 as a mediator among Malaysian automotive suppliers. Practical implications This research provides important guidelines for automotive and related companies to implement CSR practices and ISO 26000 to improve CSRP. Malaysian automotive suppliers may need to consider the measurement of CSR practices, ISO 26000 and CSRP as beneficial to their company. Based on the findings, Malaysian automotive suppliers can apply the ISO 26000 as the guideline for CSR practices to increase the CSRP. Originality/value This research makes a new contribution to ISO 26000 between CSR practices and CSRP, especially for Malaysian automotive suppliers, by using the SEM technique. This research provides important information for decision-makers involved in CSR practices, ISO 26000 and CSRP implementation and also provides useful reference for future researchers in this research area.

Ownership and corporate social responsibility in Indian firms

Abstract: Purpose The purpose of this paper is to look at the association between different ownership categories and corporate social responsibility (CSR) spending of selected Indian firms. Design/methodology/approach Random-effects Tobit panel regression is performed on a panel of 4,388 firm years of 1,722 unique firms over a three-year period (2014-2016). Findings Different categories of institutional investors have different preferences for CSR spending of a firm. Promoters of business-group affiliated and unaffiliated firms also behave differently towards CSR activities of their firms. Research limitations/implications Heterogeneous behavior of institutional investors is revealed through the study. Foreign institutions and domestic banks are supportive of CSR investments of a firm. Promoters of family firms and group affiliates also diligently plan CSR activities. Practical implications Managers cannot ignore the heterogeneities of institutional investors in their investment decisions. Individual investors can align their philanthropic preferences with those of different types of institutional investors or firms. Social implications Family-owned firms play a significant role in CSR activities of emerging economies, while individual promoters are not as attracted by the reputational prospects of CSR. Originality/value This paper considers the role of heterogeneities of institutional investors in influencing CSR spending of emerging-economy firms. This heterogeneity has not been previously studied in this context.

The influence of the institutional context on sustainability reporting. A cross-national analysis

Abstract: Purpose This paper intends to compare the sustainability reporting (SR) in three different national and institutional contexts, namely Italy, Brazil and USA, and aims to investigate whether companies show a different approach to SR depending on the institutional setting where they operate. Design/methodology/approach To reach this goal, a sample of 150 reports was content-analyzed through a methodology based on a coding process which overcomes part of the limitations in previous works. Findings Results observed a relationship between the SR and the characteristics of institutional contexts, thus suggesting that while there is a general acceptance and use of international SR standards and initiatives, the content is influenced by and shaped on the characteristics of the national institutional context. In other words, although a widely diffused base of data and information can be found in the SR of companies in different contexts, the accent is put on specific issues which reflect the political, cultural, religious, legal and otherwise defined institutions in the national system. Originality/value Using the institutional theory the paper demonstrated that institutional contexts is one of the drivers of contents of sustainability reports.

Corporate social responsibility: comparing different models

Abstract: Purpose The purpose of this paper is to present theoretical investigation into two corporate social responsibility (CSR) models proposed by Schwartz and Carroll (2003, 2008). Design/methodology/approach A descriptive study was conducted using a quantitative approach with 200 visitors. Data analysis involved, first, a factor analysis and, subsequently, a canonical analysis. Findings The results reveal that there is indeed the characteristic of convergence on the CSR dimensions, as well as confirm the correlation between the two models. Research limitations/implications This is a single case study wherein data cannot be generalized and there is a lack, so far, of a specific measure scale for the VBA (value, balance and accountability) model. Practical implications The results can contribute to studies on the development of CSR scales directed toward consumers, particularly tourist companies in emerging countries, as well as a guidance for managers in planning socially responsible actions and achieving legitimacy of their consumers. Originality/value Studies on CSR from customers’ standpoint are still scarce in developing countries, and the existing ones do not use reliable measure scales, based on theoretical models and adapted to the features of this audience. The present paper helps this discussion by considering the perspective of an emerging market for the first time.