Broadening the scope of instrumental motivations for CSR disclosure: an illustration for agroholdings in transition economies

Abstract

Large firms operating in underdeveloped institutional environments of transition economies tend to invest in seemingly unrewarded corporate social responsibility (CSR) initiatives. To explain this phenomenon, we extend the literature on the motives behind CSR disclosure in agribusiness from the institutional perspective on organizational legitimacy. The thesis is that self-interest rationales for CSR disclosure, as advocated by the strategic-legitimacy perspective, fall short of explaining the full scope of instrumental motivations for the proactive and excessive transparency initiatives of agribusiness companies. Using the example of internationally listed Ukrainian agroholdings, we show that firms faced with institutions that do not appropriately support access to market transactions not only adapt to fluctuations in the business environment but also proactively address key institutional bottlenecks by engaging in higher transparency and nonmarket initiatives. The case study analysis of the voluntary CSR disclosure of four agroholdings is conducted based on in-depth interviews with corporate managers and complemented with information from corporate reports and websites. This analysis offers insights into the development of corporate farming and its economic and social repercussions in Ukraine and, more generally, expanding the concept of CSR itself.

The Relationship Between Agricultural Holdings and Municipalities

“…Nevertheless, better promotion of their activities shall be recommended to agri-holdings. The necessity of promotion was highlighted also by Gagalyuk et al (2021) when one interview farmer stated a case when they improved street lighting, but the effort was attributed to the mayor by the inhabitants. He stated that "We have to inform and reach out to local people to make them understand who is doing all of these good things for them."…”

“…He stated that "We have to inform and reach out to local people to make them understand who is doing all of these good things for them." (Gagalyuk et al, 2021).…”

Editorial

“…Hajdu et al (2021b) build on the institutional theory of corporate social responsibility (Campbell, 2007) and conduct analysis of the survey data from Kazakhstan and Russia in order to understand the extent to which the farms' institutional environments, structural and managerial characteristics predetermine farms' engagement in CSR. Gagalyuk et al (2021) draw upon the organizational legitimacy perspective to delve into factors of CSR reporting of publicly listed Ukrainian agroholdings. The results of four case studies in Ukraine demonstrate that agroholdings tend to voluntarily report on much more CSR activities in local mass media rather than in corporate reports.…”

“…A farm is considered agroholding-affiliated if its controlling stake of more than 50% is owned by another owner, i.e. another legal entity or physical person, or if the farm itself (or its principal owner) controls 50% in equity of another farm (Ostapchuk et al, 2021;Uzun et al, in press).…”

“…Farm structures in Russia, Ukraine, Kazakhstan (2017). 1 Data from: BBC (2019), Cabinet of Ministers of Ukraine (2019), Committee (2017), Kazakhstan Statistics Committee (2019),Laikam (2018), Ministry of Agriculture of Russia (2017),Ostapchuk et al (2021),Rosreestr (2018),Rosstat (2019), UCAB (2019), Ukrstat (2017),Uzun et al (2019, in press). Of them, 652 farms belong to 85 state-owned agroholdings.5 Estimated share in total sales of agricultural production in current prices.6 Based on authors' manual collection of agroholding-level data using various open sources of information.7 Including individual entrepreneurs.…”