Political connections and corporate social responsibility reporting in Portugal

Bianchi, Maria Teresa; Monteiro, Patrícia; Azevedo, Graça; Oliveira, Jonas; Viana, Rui Couto; Branco, Manuel Castelo

doi:10.1108/jfc-10-2018-0111

Cited by 22 publications

(36 citation statements)

References 65 publications

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“…First, this study considers political directors as a heterogeneous group and explores the influence of directors' ideology and regional identity as personal characteristics that determine their decisions on CSR. Thus, our research supports arguments of the legitimacy theory on the positive influence of politicians on CSR, which, beyond the effect on CSR reporting (Fernández-Gago et al 2018;Bianchi et al 2019;Ramón-Llorens et al 2019), has been studied only in the Chinese context. In addition, our study helps to build a theoretical basis for the relationship between liberal political ideology and CSR.…”

Section: Theoretical Contributionssupporting

confidence: 87%

“…This is also reflected in the barometer of the Spanish Center for Sociological Research (CIS), which showed how the political class and political parties were the third main problem in the country in January 2011 (after unemployment and economic problems). Therefore, the context is one in which political connections are viewed with suspicion (Ramón-Llorens et al 2019), which may lead to more investment in CSR, given that cajas were forced to demonstrate that, despite this political presence, they met society's expectations (Bianchi et al 2019). Similarly, political directors, whose personal reputation was damaged, could view CSR as an appropriate strategy to improve their reputation in order to achieve personal goals.…”

Section: Institutional Frameworkmentioning

confidence: 99%

“…Prior studies have indicated several advantages (e.g., government subsidies and resources, access to financial resources, less bureaucracy and oversight, more information and influence) derived from political presence in firms (Guerra Pérez et al 2015;Li et al 2015;Zhang et al 2016;Xu and Liu 2020). However, these effects also depend on the institutional context and the specific form that the relationship between business and political connections takes (Chiu and Sharfman 2011;Bianchi et al 2019;Yu and Chi 2021).…”

Section: Introductionmentioning

confidence: 99%

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Political directors and corporate social responsibility: Are political ideology and regional identity relevant?

et al. 2022

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This study analyzes the influence of directors with political connections on corporate social responsibility (CSR). Using a sample of Spanish savings banks (cajas) during the period 2004–2013, we analyze the influence of political directors on the CSR of these entities, focusing on their ideology and regional identity. Our results indicate that the higher the proportion of directors with political ties on the board, the greater the allocation of resources to CSR activities. In addition to this positive effect of board politicization, we find that political directors’ liberal ideology positively affects CSR, both directly and in moderating the relationship between political directors and CSR. Our results also validate that political directors’ regional identity boosts the positive effect they have on CSR. Finally, we encounter various differences depending on the nature of the projects funded through CSR. Therefore, our study demonstrates the importance of delving into the characteristics of political directors to elucidate their effects on corporate policies.

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Section: Theoretical Contributionssupporting

confidence: 87%

Section: Institutional Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Political directors and corporate social responsibility: Are political ideology and regional identity relevant?

et al. 2022

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“…For example, Davidson et al (2019) discuss that the materialistic managers have lesser concern for others, and are less sensitive to how their actions affect the community and environment. Muttakin et al (2018) suggest that the perceived need for CSR as a legitimation strategy diminishes for politically connected firms, and Bianchi et al (2019) argue that in settings where the existence of political connections are viewed as damaging collective interests of stakeholders, political connected firms can deal with legitimacy issues from such connections by resorting to CSR practices and the reporting thereof. In addition, López-González et al (2019) suggest that family firms have shown to have a singular behavior in terms of CSR, earnings management, and concern for maintaining their reputation.…”

Section: Discussionmentioning

confidence: 99%

The Impact of Corporate Social Responsibility on Regulatory Comment Letters: Evidence from Iran

Hesarzadeh

2022

Rev. contab.

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Securities commissions regularly review corporate reports, and if the review reveals a possible deficiency— such as a potential accounting error— or requires further clarifications, they send the company a comment letter (CL), including a request for providing written responses and relative additional information. Current study aims to examine whether and how corporate social responsibility (CSR) affects CLs. This empirical study is based on a sample of 437 Iranian firm year observations from 2011 to 2017. Results show that firms with more CSR are less likely to receive CL, that more CSR does not influence the association of managerial misbehavior and CLs, and that the negative association between CSR and CLs is stronger among firms facing higher environmental information asymmetry and firms having higher corporate governance quality. Collectively, this paper contributes to the literature by providing new evidence on the beneficial effect of CSR in the context of CLs. Las comisiones de valores revisan periódicamente los informes de las empresas, y si la revisión revela una posible deficiencia -como un posible error contable- o se requiere más aclaraciones, envían a la empresa una carta de comentarios (CL), que incluye una solicitud de respuesta por escrito y la relativa información adicional. El presente estudio pretende examinar si la Responsabilidad Social de las Empresas (RSE) afecta a las cartas de comentarios y cómo lo hace. Este estudio empírico se basa en una muestra de 437 observaciones anuales de empresas iraníes desde 2011 hasta 2017. Los resultados muestran que las empresas con más RSC tienen menos probabilidades de recibir CL y que más RSC no influye en la asociación entre mal comportamiento de los directivos y CL. También se pone de manifiesto que la asociación negativa entre RSC y CL es más fuerte entre las empresas que enfrentan una mayor asimetría de información ambiental y las empresas que tienen una mayor calidad de gobierno corporativo. En conjunto, este trabajo contribuye a la literatura aportando nuevas pruebas sobre el efecto beneficioso de la RSC en el contexto de las CL.

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“…By contrast, Alazzani et al (2019) document that the presence of royal family members on the board of directors is associated with higher levels of CSR reporting in six Gulf Cooperation Council countries including Kingdom of Saudi Arabia, UAE, Bahrain Qatar, Oman and Kuwait. In the same vein, Bianchi et al (2019) document that there is a positive relation between political connections and CSR reporting in Portugal.…”

Section: Political Connection Effectsmentioning

confidence: 93%

A review of the influence of political connections on management’s decision in non-US settings

Amara

Khlif

2020

JFRA

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Purpose Given the interest in better understanding the economic effects of political connections, this paper aims to review empirical studies in the accounting and finance domain investigating the effects of firms’ political connections on management’s decision in non-US settings. Design/methodology/approach Key words used to search for relevant studies include “political connections” linked with “tax avoidance,” “earnings quality” “voluntary disclosure.” The authors consult several editorial sources including Elsevier, Electronic Journals Service EBSCO, Emerald, Springer, Palgrave Macmillan, Sage, Taylor & Francis and Wiley-Blackwell. The authors’ search yields 46 published studies since 2006. Findings The review reveals a prevalence of studies conducted in Asia. A narrative synthesis of empirical findings shows mixed effects of political connections on earnings management, as measured by accrual-based or real earnings management practices. Mixed evidence also exists for the association between political connections and reporting policy (e.g. corporate social responsibility reporting). The review also reveals that firms with political ties adopt an aggressive tax policy aimed at reducing effective tax rates and are more likely to choose a Big 4 auditor. Originality/value The review discusses the political connections literature focusing on studies outside of the USA and the effect of such connections on decision-making by management. It identifies some limitations of this literature and offers guidance for future research avenues. The synthesis suggests that political connections can adversely or beneficially impact management’s decisions depending on the legal, institutional and cultural characteristics prevailing in a particular setting.

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Political connections and corporate social responsibility reporting in Portugal

Cited by 22 publications

References 65 publications

Political directors and corporate social responsibility: Are political ideology and regional identity relevant?

Political directors and corporate social responsibility: Are political ideology and regional identity relevant?

The Impact of Corporate Social Responsibility on Regulatory Comment Letters: Evidence from Iran

A review of the influence of political connections on management’s decision in non-US settings

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