The Impact of Greenhouse Gas Emissions on Corporate Social Responsibility in Korea

Few studies examine how firms make strategic decisions over time. In this study, we test whether a firm undertakes corporate social responsibility (CSR) activities as a function of its life-cycle stage. Drawing on prior CSR research that finds ethical concerns and opportunistic behavior to be two key motivations that underpin CSR activities, we hypothesize that firms in their growth stage are positively associated with CSR, while firms in stage of decline are less likely to invest in CSR. The empirical findings of our study—derived by leveraging a sample of South Korean listed firms—are consistent with these predictions. We further find that in the growth stage, group-affiliated firms are more engaged in CSR than are unaffiliated firms. Given that affiliated firms can share the resources of other group-member firms, this evidence supports the slack resource hypothesis. Overall, our results indicate that firms have different CSR strategies, depending on their life-cycle stage.

Section: Proxy Of Corporate Social Responsibility Activitiesmentioning

confidence: 99%

Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

Lee

Choi

2018

“…The coverage of CSR-related issues by the KEJI index includes community contributions (i.e., charitable giving, tax issues, and support for community and human rights), diversity (i.e., inclusion and fair treatment of minority groups), consumer protection, fair trade with business partners, employee satisfaction, environmental protection, and soundness in corporate governance and investments [16,17]. The KEJI reports that they collect relevant CSR information from a wide array of sources, including government agencies, mass media coverage, and other civic organizations.…”

Section: Data Sources and Samplementioning

confidence: 99%

“…We validate our theoretical argument using data on the publicly listed Korean firms, whose CSR performances are evaluated by the KEJI (Korean Economic Justice Institute) with respect to multiple dimensions of CSR, including: community contribution and diversity, consumer protection, fair trade with business partners, employee satisfaction, environmental protection, and corporate governance [16,17]. We believe that our empirical context serves as an attractive setting to test our hypotheses, largely because the societal demand for ethical conduct from local companies has peaked in Korea during the last two decades.…”

Section: Introductionmentioning

confidence: 99%

How Third-Party CSR Evaluation Matters: Keeping Up with Rivals in CSR Performance Ratings of Korean Firms, 2011–2015

Hyun

2017

Does corporate social responsibility (CSR) evaluation by third-party entities (i.e., external agencies, including civic organizations) affect the CSR performance of firms? This article explores the question of whether and how third-party CSR ratings change the subsequent CSR behavior and hence performance of rated firms. Combining insights from the research on ratings/rankings and a behavioral theory of firms, we hypothesize that firms with large negative CSR rating gaps-i.e., CSR ratings below the industry average-are more prone to improving their subsequent CSR behavior, and hence performance ratings, than those with small negative gaps, because of the desire to avoid being viewed as CSR laggards relative to their industry rivals. As a result, efforts are directed at enhancing CSR performance. Empirical support for this conjecture is found through random effect regression analyses of publicly listed firms in Korea that were rated by the KEJI (Korean Economic Justice Institute) during 2011-2015 with respect to multiple dimensions of CSR. Further results show that the positive effect of negative CSR rating gaps on subsequent CSR ratings appears only in the firms without well-established reputations, suggesting the possibility that firms with weak reputations have stronger incentives to keep up with other industry incumbents in CSR performance ratings than their counterparts.

“…Following the literature, we used CSR scores released by The Korea Economic Justice Institute (KEJI) as a proxy for CSP [33,34]. The KEJI annually evaluates Korean public companies in terms of social responsibility and ethical management and publicly provides CSP of the top 200 companies.…”

Section: Corporate Social Performance (Csp)mentioning

confidence: 99%

The Effect of Corporate Social Performance on Audit Hours: Moderating Role of the Emphasis of Matter Paragraphs in Audit Report

Kim

Jung

2020

This study investigated the effect of corporate social performance (CSP) on audit hours and whether the emphasis of matter (EOM) paragraphs in audit report moderates the association between CSP and audit hours. Auditors input audit hours based on the judgement of audit risk related to firm and managerial characteristics. They increase audit hours when they perceive that client companies are riskier; thus, audit hours reflect auditors' perceptions of the firm. Prior studies have shown that high CSP is associated with ethical managers, leading to fewer audit hours. However, auditors' perceptions of CSP can be different depending on their knowledge about firms' potential risks. EOM paragraphs consists of risk-related factors, such as going-concern opinions or litigation and they should be considered when auditors determine that users need to check this information acquired in the auditing process. Therefore, EOM is likely to affect auditors' perceptions of CSP. This study investigates this possibility by examining whether the associations between CSP and audit hours are different in firms with and without EOM paragraphs in audit reports. Using Korean listed companies from 2011 to 2016, we found that CSP has a negative association with audit hours, suggesting that better CSP is related to ethical corporate social responsibility (CSR) in Korea, consistently with the literature. However, CSP is not related to audit hours for firms with EOM paragraphs, possibly indicating that auditors differently interpret CSP based on their knowledge gained in the auditing process. Our findings contribute to the literature by suggesting that EOM paragraphs can be used in distinguishing firms' CSR motivations and that information users should be careful in interpreting CSP.