Putting your money where your mouth is: why sustainability reporting based on the triple bottom line can be misleading.
ABSTRACT: In the packaged food industry, Corporate Social Responsibility (CSR) is an informal requirement for which firms account through sustainability reporting. CSR behaviors are often reported and analyzed using the Triple Bottom Line (3BL) framework, which categorizes them as affecting people, planet, or profit. 3BL is useful in determining which of these categories is most elaborated upon by the firm, but has a limited scope and many documented criticisms. This paper aims to address the aforementioned insufficiencies by augmenting the 3BL framework with two important attributes of CSR practices: (1) the presence of change in core firm behavior of the firm itself or of others in the supply chain, and (2) whether the behavior qualifies as being outside of the firm's normal business practice or is something that they might have done anyway. We qualitatively analyze CSR behaviors described in sustainability reports and interviews from major players in the packaged food industry and categorize them using these attributes as a supplement to 3BL. This enables us to separate the behaviors from their framing and analyze them more critically. Our results demonstrate how the visible CSR efforts of a firm can be misleading at first glance. Using only 3BL, we find that the CSR focus of firms in this industry is people. We then discover that the codes focusing on people (as opposed to planet or profit) require the least amount of real structural change from a firm or its supply chain partners, and thus arguably, the least amount of effort. We also find that behaviors that focus on planet require the most effort within the firm itself, but for behaviors involving supply chain partners, effort is required for behaviors in all three categories. Finally, we find that CSR behavior that is related to planet tends to go beyond normal business practice.
Project description:This study investigates the link between corporate social responsibility (CSR) disclosure for multi-stakeholders and financial performance of a firm through accounting-based activities for CSR. A dataset of Chinese non-financial firms listed on the Shanghai Stock Exchange from 2008 to 2012 is taken from the China Stock Market & Accounting Research database. The study compares different financial ratios of CSR disclosure and non-disclosure firms. Moreover, the financial ratios of CSR disclosure firms also compare with the industry averages. The results suggest that the financial of CSR disclosure firms are better than both CSR non-disclosure firms and industry averages. These financial ratios ensure the claim of a firm that they are socially responsible toward multi-stakeholders. Further, the same financial ratios are used as moderator variables between CSR disclosure for multi-stakeholders (independent variable) and firm financial performance (dependent variable). The relationship between CSR disclosure and firm value is moderated by the financial ratios. The moderation effect of financial ratios is rarely used in the literature of CSR disclosure and firm value.
Project description:Intellectual capital (IC) and corporate social responsibility (CSR) provide a strong link between the enterprise and stakeholders. These strategic approaches are responsible in value formation for better financial performance. This study investigates the mediating effects of corporate financial performance on the relationship between IC components (ICs) and CSR of firms from the food industry in Asia. We analyzed 308 firm-year observations of 44 listed firms from 2011 to 2017. The results of this study provided mixed findings regarding the effects of ICs and CSR. In addition, results vary from the disaggregated effects of each IC component on environmental, social, and governance pillars. The results also indicate that the combination of accounting and market-based estimates of financial performance was found to be significant mediating factor to explain the phenomenon which varies per ICs and dimensions of CSR. Lastly, the implications for sustainable business practices and investments in knowledge-based resources in the food industry are elaborated.
Project description:The excellence of corporate governance in companies lies in their ability to adopt the corporate social responsibility (CSR), which enhances their growth. This study examines the effect of agency cost, firm size, and CSR disclosure on the firms' growth. Specifically, the study analyzed the agency cost and firms' size as the moderators that influence the firms' performance asymmetrically. In its approach, the study compiled data of 300 Pakistani listed companies, which have a significant concern with CSR for the period 2010-2018. Using the 2SLS and GMM instrumental panel regressions, our empirical results show that the agency cost is detrimental to the firms' growth. In contrast, the firms' size boosts the firms' growth. Moreover, the growth of firms with leverage declines and the presence of independent directors improves the firms' growth.
Project description:The firm?s suppliers are in most social responsibility literature considered a branch of the firm?s stakeholders that may not necessarily benefit directly from the firm?s social responsibility practices. However recent studies on CSR from the developing country?s perspective has highlighted the importance that needs to be placed on supply chain improvement. Thus, this article presents data on the effect of supply chain improvement as a construct of corporate social responsibility on operational competency. The study employed a descriptive quantitative research design survey method. The study population consists of 1748 employees from four top oil and gas firms quoted in the Nigerian stock exchange. A sample size of 350 employees were selected. Data was analysed using statistical Package for Social Sciences (SPSS). Regression analysis was employed as the statistical tool of analysis. The field data set is made widely accessible in this article.
Project description:Seeking to obtain efficiency in the development and integration of knowledge about R&D and corporate social responsibility (CSR), firms face hard choices about their resource allocation to these two areas because of the specialized nature of knowledge and related barriers to integration. We address this organizational resource allocation dilemma by relaxing the common assumption that firms are either responsible or irresponsible and examining financial slack as a possible moderator. Using a multicountry sample of 1,957 firms over a 16-year timespan, we find strong empirical support for the positive association between firms' R&D intensity and CSR specialization, a novel concept that-distinct from CSR as such-gauges the extent to which firms specialize in specific environmental, social, or governance aspects of CSR. However, there is insufficient support for financial slack as a moderator in general (except for one noteworthy industry pattern and an alternative operationalization of slack). The exceptions suggest that the nature of organizational slack may influence the relationship between R&D and CSR specialization.
Project description:This article contains survey data from 588 firms on 1) their length of survival, 2) technological innovation related information, such as research and development (R&D) investment, research manpower, and the number of patent applications, along with 3) other basic data on firm size and affiliated industry sector. The dataset was extracted from firms residing in three different innovation cluster regions of Korea. All the data in this article are based on firm level questionnaire in the innovation cluster regions, with the exception of the firm survival information extracted from the National Tax Service of Korea and industry information from "Statistics Korea". The related research article using the current dataset was published under the following title: "Does R&D investment increase SME survival during a recession?" Jung et al., 2018.
Project description:This paper provides a micro-foundation for dual market structure formation through partitioning processes in marketplaces by developing a computational model of interacting economic agents. We propose an agent-based modeling approach, where firms are adaptive and profit-seeking agents entering into and exiting from the market according to their (lack of) profitability. Our firms are characterized by large and small sunk costs, respectively. They locate their offerings along a unimodal demand distribution over a one-dimensional product variety, with the distribution peak constituting the center and the tails standing for the peripheries. We found that large firms may first advance toward the most abundant demand spot, the market center, and release peripheral positions as predicted by extant dual market explanations. However, we also observed that large firms may then move back toward the market fringes to reduce competitive niche overlap in the center, triggering nonlinear resource occupation behavior. Novel results indicate that resource release dynamics depend on firm-level adaptive capabilities, and that a minimum scale of production for low sunk cost firms is key to the formation of the dual structure.
Project description:We investigate the determinants of the sign of Research and Development reaction functions of rival firms. Using a two-stage n-firm Cournot competition game, we show that this sign depends on four types of environments in terms of product rivalry and technology spillovers. We test the predictions of the model on the world's largest manufacturing corporations. Assuming that firms make R&D investments based on the R&D effort of the representative rival company, we develop a dynamic panel data model that accounts for the endogeneity of the decision of the rival firm. Empirical results thoroughly corroborate the validity of the theoretical model.
Project description:Fairness concern behavior is extremely common in social life, and many scholars are beginning to pay attention to this behavior. In this study, we investigate a two-echelon construction supply chain that consists of a general contractor and a subcontractor under cap-and-trade policy. We study the carbon emission reduction decisions and profit distribution mechanism in the construction supply chain with fairness concern and cap-and-trade. We use the Nash bargaining model to describe the fairness concerns of the construction supply chain members and use the co-opetition model to portray the profit distribution. We show that the fairness concern can impose an adverse influence on firms' profits and decrease the magnitude of their carbon emission reductions. The subcontractor's fairness concern causes greater losses to the construction supply chain's profit. We further demonstrate the impact of fairness concern on the optimal decisions of the general contractor and the subcontractor through numerical analysis.
Project description:Highlights • We study the effect of governance and culture on firms’ environmental performance and disclosure.• Governance best practices improve performance and disclosure.• Cross listing is related to better performance and higher disclosure quality.• Cultural backgrounds are important determinants of performance and disclosure. This paper investigates the impact of corporate governance and culture background on firms’ environmental performance and CSR disclosure from a global perspective. It provides evidence of a positive relationship between environmental performance and CSR disclosure, supporting the voluntary disclosure theory. We find that common internal corporate governance best practices (such as CEO non-duality, ESG committees and gender diversified boards) are associated with better environmental performance and more disclosure of CSR related information. Debt is an effective internal governance vehicle and positively affects firms’ environmental performance and CSR disclosure. Cross-listed firms perform better environmentally and disclose more CSR information. Firms residing in countries with stronger legal systems have less voluntary CSR disclosure, implying that external governance is functional and may partially serve as a substitute for internal governance. In terms of culture influence, we find that firms in countries with low power distance, individualism, femininity, high uncertainty avoidance, and long-term orientation perform better environmentally. Firms in low power distance, collectivistic, feminine, long-term oriented, high uncertainty avoidance and restrained countries disclose more CSR information.