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Article
Publication date: 2 December 2019

Carol-Ann Tetrault Sirsly, Elena Lvina and Catalin Ratiu

This study aims to test Mattingly and Berman’s (2006) taxonomy of social actions and develops divergent expectations for corporate social responsibility (CSR) dimensions…

Abstract

Purpose

This study aims to test Mattingly and Berman’s (2006) taxonomy of social actions and develops divergent expectations for corporate social responsibility (CSR) dimensions directed toward institutional and technical stakeholders, with an aim to determine when CSR directed to different stakeholders is most likely to improve corporate reputation.

Design/methodology/approach

A longitudinal sample of 285 major US corporations was used to quantitatively test the hypotheses. Data was sourced from KLD, Osiris and Fortune MAC.

Findings

Strengths in CSR and actions directed toward technical stakeholders influence corporate reputation in a more profound way, when compared to those directed toward institutional stakeholders. Contrary to the authors’ prediction, institutional concerns do not demonstrate a significant growth or reduction over the five-year period.

Research limitations/implications

This study provides a longitudinal test of Mattingly and Berman’s (2006) taxonomy of CSR actions and makes an important methodological contribution by operationalizing CSR not as a continuum from strengths to concerns, rather as two distinct constructs.

Practical implications

Management practice can benefit from a more fine-grained approach to stakeholder expectations and reputation outcomes. The results of this study leverage relevant stakeholder impact while allowing firms to appreciate the change in CSR actions and to measure it accordingly, such that the undesirable status quo that leads to potential loss in reputation growth can be avoided.

Social implications

As organizations explore ways to effectively engage stakeholders for mutual benefit, this research shows how firms can have a positive impact.

Originality/value

This study tests and extends theory through an integrated lens, built on the stakeholder and resource dependence theories, while directing management attention to the broader reputational outcomes of targeted CSR initiatives. It provides justification for CSR investments over time.

Details

Journal of Global Responsibility, vol. 11 no. 1
Type: Research Article
ISSN: 2041-2568

Keywords

Article
Publication date: 1 September 2008

Jamie D. Collins, Dan Li and Purva Kansal

This study focuses on home country institutions as sources of variation in the level of foreign investment into India. Our findings support the idea that institutional

Abstract

This study focuses on home country institutions as sources of variation in the level of foreign investment into India. Our findings support the idea that institutional voids found in India are less of a deterrent to investments from home countries with high levels of institutional development than from home countries with similar institutional voids. Overall, foreign investments in India are found to be significantly related to the strength of institutions within home countries. The levels of both approved and realized foreign direct investment (FDI) are strongly influenced by economic factors and home country regulative institutions, and weakly influenced by home country cognitive institutions. When considered separately, the cognitive institutions and regulative institutions within a given home country each significantly influence the level of approved/realized FDI into India. However, when considered jointly, only the strength of regulative institutions is predictive of FDI inflows.

Details

Journal of Asia Business Studies, vol. 3 no. 1
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 14 January 2014

Rosamaria Moura-Leite and Robert Padgett

The paper analysed how the strengths and weaknesses of a firm's social actions with its different types of primary stakeholders impact on its reputation. The paper aims to…

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Abstract

Purpose

The paper analysed how the strengths and weaknesses of a firm's social actions with its different types of primary stakeholders impact on its reputation. The paper aims to discuss these issues.

Design/methodology/approach

This research adopts Mattingly and Berman's typology to measure corporate social performance data, which differentiates primary stakeholder between institutional and technical. The first provides intangible support and the second tangible support to the firm. The hypotheses compare the effect that different social actions measures can have on corporate reputation (CR). The authors test the hypotheses empirically using two samples composed of US firms and two CR measures.

Findings

The authors found that institutional stakeholders are deemed to hold normative expectations of a firm's behavior, impacting strongly on CR, unlike technical stakeholders, that have an economic exchange relationship with the firm. In addition to corporate social actions toward technical stakeholders are viewed as self-serving actions and are therefore less likely to impact on CR.

Practical implications

The research can be very useful for business managers since it provides theoretical discussion and empirical proof about the effect of social actions on CR, which can assist them in designing or modifying social responsibility strategies used by the firm in order to build a positive CR.

Originality/value

The paper develops a framework on CR, highlighting the valuable roles that different types of social actions play in reputation building, and proposes a new model that identifies the impact of different types of social actions on organizational reputation.

Details

Management Research Review, vol. 37 no. 2
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 12 October 2012

Lu Zhang

Drawing on agency theory and resource dependence theory, the study aims to link board demographic diversity and independence to corporate social performance.

4407

Abstract

Purpose

Drawing on agency theory and resource dependence theory, the study aims to link board demographic diversity and independence to corporate social performance.

Design/methodology/approach

Data were collected from various sources for a sample of 475 publicly traded Fortune 500 companies between the years 2007 and 2008.

Findings

It is found that board gender diversity is positively related to institutional and technical strength ratings, while board racial diversity is positively related to institutional strength rating only. Both the proportion of outside directors and CEO non‐duality were negatively associated with institutional and technical weakness ratings.

Research limitations/implications

The sample was predominantly large, publicly traded national and international corporations, which might limit the generalizability of the findings.

Practical implications

Management personnel should be cognizant of how board configurations and leadership structure may influence their corporate reputation for social responsibility. Efforts should be made to foster a group dynamic that is conducive to effective board functioning.

Originality/value

Few empirical studies have examined the relationship between board characteristics and corporate social performance. This study contributes to the literature by examining such associations.

Details

Corporate Governance: The international journal of business in society, vol. 12 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 11 December 2019

Habib Jouber

This paper aims to examine whether corporate social responsibility (CSR) is associated with firms’ earnings quality (EQ) and how this association is context-specific. The…

Abstract

Purpose

This paper aims to examine whether corporate social responsibility (CSR) is associated with firms’ earnings quality (EQ) and how this association is context-specific. The authors consider specific institutional differences in strength of corporate governance (CG) attributes, quality of law enforcement and level of investor protection found between Anglo-American, European and South-Eastern Asian CG models to test the impact of above country-level factors on this association.

Design/methodology/approach

To test the association between CSR and EQ, the authors consider EIRIS (Ethical Investment Research Service) (2018) CSR issues of sustainability indicators as proxy to capture CSR. Following Rezaee and Tuo’s (2019) study, the authors classify EQ into innate earnings quality (IEQ) and discretionary earnings quality (DEQ). The authors investigate the innate (discretionary) EQ as to refer to firm’s inherent operating uncertainty (earnings management). Several dependency models for panel data applying the generalized method of moment (GMM) estimator of Arellano and Bond (1991) are ruled based on archival data of 4,206 non-financial international listed firms over the period 2012-2017.

Findings

Univariate and GMM multivariate cross-country analyses show that CSR is positively associated with EQ and that this association is more pronounced for firms within countries where good CG tools and higher investor right protection are preserved. The authors interpret the findings as evidence that the CSR-EQ association is shaped by the degree of monitoring role played by institutional features at the country level. The results are robust to a battery of robustness tests.

Originality/value

The originality of this research is twice. On the one hand, it examines whether CSR is a reflection of manager’s ethical opportunistic behavior resultant on earnings quality derived from a firm’s innate traits. On the second hand, it tests whether CSR is a reflection of discretionary earnings quality manifested by earnings management behavior. This paper is the first to support that institutional features significantly matter when investigating the association between CSR and EQ.

Article
Publication date: 1 June 1999

Lewis E. Hill

An intellectual symbiosis exists between social economics and institutional economics because the strengths and weaknesses of these two leading schools of heterodox…

5883

Abstract

An intellectual symbiosis exists between social economics and institutional economics because the strengths and weaknesses of these two leading schools of heterodox economic thought are complementary. Axiology and goals are the strength of social economics and the weakness of institutional economics. Epistemology and methodology are the strength of institutional economics and the weakness of social economics. The rationalistic and metaphysical axiology of the social economists can be effectively merged with the empirical and pragmatic epistemology of the institutional economists. The resulting symbiotic synthesis will certainly provide the basis for a creative integration of social and institutional economics into a new and improved school of heterodox economic thought.

Details

International Journal of Social Economics, vol. 26 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 16 November 2020

Merve Kılıç, Ali Uyar, Cemil Kuzey and Abdullah S. Karaman

The objective of this study is to investigate whether the institutional environment is associated with the adoption of integrated reporting.

Abstract

Purpose

The objective of this study is to investigate whether the institutional environment is associated with the adoption of integrated reporting.

Design/methodology/approach

The sample of the study is based on the firms included in the list of Fortune Global 500. The logistic regression analysis was run to test the proposed hypotheses.

Findings

The findings indicated that the code-law orientation and strength of the institutional quality are significantly associated (i.e. positively and negatively, respectively) with the integrated reporting of Fortune 500 companies. Firms are motivated for more transparency in stakeholder-oriented and weakly regulated contexts. Thus, stakeholder pressure is more influential than shareholder interest in motivating or forcing firms to issue integrated reports. Besides, there appears to be a trade-off between the public sector and the private sector in terms of ensuring an accountable and transparent business environment. If the public sector does not undertake its role in ensuring a transparent business environment, the private sector fills the gap. The results are robust to alternative sampling and methodologies.

Research limitations/implications

This study implied that the stakeholder orientation of countries fosters the transparency and accountability of firms. Corporate behavior is impacted by the institutional strength or weakness of nations. The institutional theory provides an appropriate ground to understand drivers of corporate reporting practices of firms beyond firm-level characteristics.

Practical implications

The adoption of integrated reporting framework by Fortune 500 companies can be leveraged to alleviate concerns about their social and environmental impacts. Policy-makers in the countries which have a weak institutional environment force or encourage their firms to increasingly meet the transparency and accountability demands of society.

Social implications

The research findings might play an encouraging role in that various stakeholders (i.e. customers, public, civil organizations and press) should undertake active roles and responsibilities to encourage firms to behave in socially and environmentally responsible ways.

Originality/value

This study adds to the literature by examining the influence of the institutional environment on the adoption of integrated reporting, using recent international data, and focusing on the largest companies according to the Fortune's annual Global 500 list. This study is one of the first to examine the association between a set of governance characteristics (i.e. board size, board independence and board diversity) and integrated reporting adoption.

Details

Journal of Applied Accounting Research, vol. 22 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 12 June 2009

James E. Mattingly, Steven A. Harrast and Lori Olsen

The purpose of this paper is to test whether effective stakeholder management results in transparent financial reporting.

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Abstract

Purpose

The purpose of this paper is to test whether effective stakeholder management results in transparent financial reporting.

Design/methodology/approach

This paper uses a linear model informed by stakeholder theorizing and established measures of stakeholder management, earnings quality, and earnings management.

Findings

Organizations exhibiting effective stakeholder management have higher earnings quality and are less likely to engage in discretionary earnings management.

Research implications

Future research should carefully sort out the meaning of different measures of earnings quality, should clarify cross‐national institutional differences to reconcile contradictions in extant research, and should discover the underlying governance orientations that shape decision‐making processes and outcomes.

Practical implications

Governing bodies must take into account how underlying organization cultures shape governance regimes, which may determine the transparency with which organization actors interact with various stakeholder groups.

Originality/value

This study establishes a positive link between effective stakeholder management and transparent financial reporting, suggesting that both may be artifacts of deeper underlying orientations toward accountability, transparency, and managerial discretion.

Details

Corporate Governance: The international journal of business in society, vol. 9 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 15 January 2018

Amila Buddhika Sirisena and Rotem Shneor

Despite the growing numbers of internationally active nonprofit organizations (NPOs), research on various facets of NPOs’ internationalization has been limited. The…

Abstract

Purpose

Despite the growing numbers of internationally active nonprofit organizations (NPOs), research on various facets of NPOs’ internationalization has been limited. The purpose of this paper is to investigate the impact of target-country related factors on international market selection of NPOs.

Design/methodology/approach

Analysis is based on a logistic regression procedure using a self-compiled data set of 2,440 observations of de-facto entry or non-entry occurrences made by 19 large development-focused NPOs.

Findings

The study reveals that NPOs select target markets that are less developed, characterized by greater risk profiles, where other NPOs tend to cluster, and those that are preferred by their home-country governments. Moreover, findings suggest that with respect to institutional strength, NPOs balance mission to help strengthen institutions where needed, and avoidance of environments with extremely dysfunctional institutions, hence opting to operate in environments with medium levels of institutional strength.

Research limitations/implications

The study only looked at external environmental factors, it must be acknowledged that a more complete understanding of NPO market selection decisions must also include variables internal to the organization. Further the study is based on a sample of NPOs dealing with poverty alleviation, which limits the generalization. Finally, the use of data from secondary sources creates its own limitations.

Originality/value

This study represents one of the few cross country studies done on the area, thus contributing for the development of the field.

Details

International Journal of Emerging Markets, vol. 13 no. 1
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 20 November 2017

Cédric Poretti, Alain Schatt and Liesbeth Bruynseels

We examine whether the percentage of independent members sitting on the audit committee, in different institutional settings, impacts the market reaction (measured by the…

Abstract

We examine whether the percentage of independent members sitting on the audit committee, in different institutional settings, impacts the market reaction (measured by the abnormal stock returns variance and the abnormal trading volume) to earnings announcements. For our sample composed of more than 7'600 earnings announcements made by European firms from 15 countries between 2006 and 2014, we find that the market reactions to earnings announcements are significantly larger when the audit committee is more independent in countries with weak institutional setting. Our results generally hold after controlling for numerous methodological issues. We conclude that more independent audit committees are substitutes for weak institutions to increase the credibility of earnings announcements. Our results should be of great interest for European regulators who recently introduced new requirements for public firms regarding audit committees’ independence.

Details

Journal of Accounting Literature, vol. 40 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

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