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Corporate misconduct and corporate social responsibility: the roles of CEO incentives and institutional ownership

Nongnapat Thosuwanchot (Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand)
Min Suk Lee (Chulalongkorn Business School, Chulalongkorn University, Bangkok, Thailand)

Society and Business Review

ISSN: 1746-5680

Article publication date: 16 January 2025

Issue publication date: 31 January 2025

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Abstract

Purpose

This study aims to examine why executives increase investments in corporate social responsibility (CSR) as a strategic action to protect their firms’ reputation from the possibility of a contagion effect following CSR-related corporate misconduct in the industry by drawing on an impression management perspective. This study also examines internal and external governance mechanisms as boundary conditions.

Design/methodology/approach

The sample includes panel data of firms listed in the S&P 500 index from 2009 to 2013. The authors used firm fixed-effects models to test the hypotheses.

Findings

The results show that recent CSR-related corporate misconduct occurred in other firms, inducing executives to increase investments in CSR. Moreover, internal and external governance mechanisms, which are CEO incentives and institutional ownership, moderated the relationship.

Originality/value

This study contributes to prior literature on the factors influencing CSR at the multilevel of analysis by examining how recent CSR-related corporate misconduct in the industry interacts with corporate governance mechanisms as boundary conditions to influence firm commitment to CSR.

Keywords

Citation

Thosuwanchot, N. and Lee, M.S. (2025), "Corporate misconduct and corporate social responsibility: the roles of CEO incentives and institutional ownership", Society and Business Review, Vol. 20 No. 1, pp. 176-200. https://doi.org/10.1108/SBR-01-2024-0018

Publisher

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Emerald Publishing Limited

Copyright © 2025, Emerald Publishing Limited

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