An Examination of Alliances and Corporate Social Responsibility

Abstract

The rate of alliance formation by firms has greatly increased over the past two decades. Congruently, firm interest in corporate social responsibility (CSR) initiatives has also increased. Signaling theory suggests that firms may be increasing their CSR strategies in an effort to signal their willingness to operate within social mores. However, firms are faced with the problem of how to communicate their social commitment objectively to stakeholders. We argue that firms are forming CSR alliances in an attempt to signal an objective message to stakeholders concerning their commitment to CSR. To provide insight into these explanations, we compare the Total CSR performance (TCSR) scores of firms that form CSR alliances with those firms that do not. We control for firm size, leverage, profitability, and industry. We find that firms that form CSR alliances generally have higher TCSR scores, which suggests that one of the reasons that firms form these alliances is to publicize their stronger social and environmental records to stakeholders.

Citation

Kopka, K., Mahoney, L.S., Convery, S.P. and LaGore, W. (2014), "An Examination of Alliances and Corporate Social Responsibility", Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 109-130. https://doi.org/10.1108/S1574-076520140000018004