Do Distinct CSR Categories have Distinct Determinants? The Roles of Market Structure and Firm Size

Abstract

Despite the existing vast literature on corporate social responsibility (CSR), there is a lack of research on the determinants of CSR categoriesenvironment, employees, community, and governance. Why do some firms dedicate more effort to community, while others focus on environment or employees? We address these issues with special attention to the roles of market structure and firm size, controlling for industry, geography, regulatory and macroeconomic variables. Answers are relevant for firms' strategic decisions, taking into account what rivals likely choose, in a world where CSR is often a competition tool. Public authorities also benefit on choosing focus: lack of competition; small or large sized firms; which categories are more affected. We find that all CSR categories profit more from a competitive setup, particularly employees and environment, and from larger firms, mainly environment. Size and market concentration thus contribute in different directions to CSR, contradicting their usually presumed positive association.

National Culture and Corporate Social Responsibility

“…In regard to the control variables, there were positive influences of the company size (CS), concentration of ownership (COO), and internationalization (INT) on the CSR performance of the companies investigated. Regarding size, larger companies exhibit better CSR performance, thus corroborating several studies on the determinants of CSR (Reverte, 2009;Gamerschlag et al, 2011;Wang, Song, & Yao, 2013;Kühn et al (2018); Pradhan & Nibedita, 2019;Acabado et al, 2019).…”

“…The results also indicate that companies from the financial sector have better CSR performance, which corroborates the findings of Kühn et al (2018), Gamerschlag et al (2011), andAcabado et al (2019). This behavior may be related to the lower environmental impact of this business sector on society when compared to other economic sectors (Kühn et al, 2018;Acabado et al, 2019).…”

The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

“…These findings are in line with those of Youn et al (2015), Udayasankar (2008); Galbreath and Benjamin (2010); and Çera (2020) who concluded that firm size does not matter in CSR. Although they contradict with Acabado et al (2020); Godos-Díez et al (2020); and Orazalin (2019) who argued that firm size is an important determinant of its CSR engagement.…”

“…Firm size is measured by taking the natural log of total assets; one of the most frequently used measures for firm size (Salhi et al , 2019; Kachouri et al , 2020; Chakroun et al , 2019). As larger firms possess more resources, they are thus more likely to invest in CSR (Acabado et al , 2020; Godos-Díez et al , 2020). Moreover, because they receive more attention from the public they are under higher pressure to disclose more information about CSR activities to legitimize their activities (Gavana et al , 2017; El-Bassiouny and Letmathe, 2018; Welbeck, 2017; Orazalin, 2019).…”

Market differentiation threshold and the relationship between corporate social responsibility and corporate financial performance

“…This study used the CSR ratings of the firms presented in the CSRHub (https://www.csrhub.com), which was a company that specialized in categorizing and reporting the CSR values. The recent CSR‐related studies have used the CSRHub index (Acabado et al, ; Bu, Liu, Wagner, & Yu, ; Thanetsunthorn, ). Furthermore, the CSRHub derived data from various sources for estimating the CSR performance of the firms.…”