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Article

Shou-Lin Yang, Yung-Ming Shiu and Tsung-Chi Liu

The purpose of this paper is to re-examine the statement of Peloza (2006) that enterprise corporate social responsibility (CSR) investment provides a protection efficacy…

Abstract

Purpose

The purpose of this paper is to re-examine the statement of Peloza (2006) that enterprise corporate social responsibility (CSR) investment provides a protection efficacy similar to insurance.

Design/methodology/approach

This study uses the event study method and data from the 2008-2010 China listed company social responsibility report and the Taiwan Economic Journal.

Findings

The authors find that the insurance-like effect of CSR investment also exists in China. Both short- and long-term CSR investments of Chinese companies provide this efficacy to corporate stock prices. The authors also find diminishing marginal insurance-like effects in China market.

Originality/value

The CSR investment of firms in China can reduce company stock-price loss when negative events occur. The authors therefore obtain a better understanding of the value of enterprise CSR investment.

Details

Chinese Management Studies, vol. 9 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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Article

Yuanhui Li and John Ferguson

The purpose of the papers included in this issue is to cover a broad range of contemporary issues in Chinese corporate financial management and therefore provide the…

Abstract

Purpose

The purpose of the papers included in this issue is to cover a broad range of contemporary issues in Chinese corporate financial management and therefore provide the readers with important insights into Chinese financial markets as well as the social and economic consequences of firm behavior in the Chinese context.

Design/methodology/approach

The first part of this issue is a special section on “Corporate Finance and Corporate Social Responsibility”, which includes three papers that explore various aspects of corporate social responsibility (CSR) from a finance perspective – including the relationship between CSR and the cost of equity, the “insurance-like effect” of CSR and competition in corporate philanthropy. The remainder of the issue includes seven further papers that cover a wide range of finance-related topics, including currency and equity, monetary policy, cross-border mergers and acquisitions, earnings management, overseas investment, information disclosure, social capital and cosmopolitanism. All of the papers included in this issue are based on empirical research that draws on primary and secondary data from Chinese financial markets and from the information disclosures of Chinese enterprises.

Findings

The authors are confident that such in-depth discussions and analysis will help researchers and practitioners to develop a better understanding of the issues faced by Chinese managers in the context of China’s economic transformation. The findings reported in this issue will help inform and develop Chinese management theories based on a wide range of Chinese management practices.

Originality/value

Each paper in this issue reports on different aspects of finance, reporting and management in the Chinese context, discussing findings that have both relevance and significance beyond China.

Details

Chinese Management Studies, vol. 9 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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Article

Mauro Fracarolli Nunes, Camila Lee Park and Ely Laureano Paiva

The study investigates the interaction of sustainability dimensions in supply chains. Along with the analysis of sustainability trade-offs (i.e. prioritizing one dimension…

Abstract

Purpose

The study investigates the interaction of sustainability dimensions in supply chains. Along with the analysis of sustainability trade-offs (i.e. prioritizing one dimension to the sacrifice of others), we develop and test the concept of cross-insurance mechanism (i.e. meeting of one sustainability goal possibly attenuating the effects of poor performance in another).

Design/methodology/approach

Through the analysis of a 20-variation vignette-based experiment, we evaluate the effects of these issues on the corporate credibility (expertise and trustworthiness) of four tiers of a typical food supply chain: pesticide producers, farmers, companies from the food industry and retail chains.

Findings

Results suggest that both sustainability trade-offs and cross-insurance mechanisms have different impacts across the chain. While pesticide producers (first tier) and retail chains (fourth tier) seem to respond better to a social trade-off, the social cross-insurance mechanism has shown to be particularly beneficial to companies from the food industry (third tier). Farmers (second tier), in turn, seem to be more sensitive to the economic cross-insurance mechanism.

Originality/value

Along with adding to the study of sustainability trade-offs in supply chain contexts, results suggest that the efficiency of the insurance mechanism is not conditional on the alignment among sustainability dimensions (i.e. social responsibility attenuating social irresponsibility). In this sense, empirical evidences support the development of the cross-insurance mechanism as an original concept.

Details

International Journal of Operations & Production Management, vol. 40 no. 9
Type: Research Article
ISSN: 0144-3577

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Article

Pattanaporn Chatjuthamard, Pornsit Jiraporn, Pattarake Sarajoti and Manohar Singh

The study investigates the effect of political risk on shareholder value, using an event study and a novel measure of firm-level political risk recently developed by…

Abstract

Purpose

The study investigates the effect of political risk on shareholder value, using an event study and a novel measure of firm-level political risk recently developed by Hassan et al. (2017). In addition, the authors explore how corporate social responsibility (CSR) influences the effect of political risk on shareholder wealth.

Design/methodology/approach

The authors exploit the guilty plea of Jack Abramoff, a well-known lobbyist, on January 3, 2006, as an exogenous shock that made lobbying less effective and less useful in the future, depriving firms of an important tool to reduce political exposure.

Findings

The results show that the market reactions are significantly more negative for firms with more political exposure. Additional analysis corroborates the results, including propensity score matching, instrumental-variable analysis and Oster's (2019) method for testing coefficient stability. Finally, the authors note that the adverse effect of political risk on shareholder value is substantially mitigated for firms with strong social responsibility, consistent with the risk mitigation hypothesis.

Originality/value

This study is the first to explore the effect of political risk on shareholder value using a novel measure. Furthermore, it is also the first to show that CSR alleviates the cost of political risk to shareholders.

Details

Managerial Finance, vol. 46 no. 10
Type: Research Article
ISSN: 0307-4358

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Article

Devie Devie, Lovina Pristya Liman, Josua Tarigan and Ferry Jie

With an attempt to give a deeper explanation regarding the manifestation of socially and environmentally responsible cultures among Indonesian natural resources industry…

Abstract

Purpose

With an attempt to give a deeper explanation regarding the manifestation of socially and environmentally responsible cultures among Indonesian natural resources industry, this paper aims to highlight the empirical confirmation on the correlation of corporate social responsibility (CSR), corporate financial performance (CFP) and risk. Likewise, corporate risk’s role as a mediating variable in the indirect effect of CSR on CFP is also examined.

Design/methodology/approach

Kinder, Lydenberg and Domini’s (KLD) measurement approach is used as a basis to assess social responsibility activities as it gives more social rating transparency. CFP captures both accounting- and market-based measurements, whereas volatility of stock return is adopted as a proxy of firm risk. Partial least squares analysis is conducted on 40 Indonesian listed firms in natural resources sector, with observation years from 2008 to 2016.

Findings

It is revealed that CSR positively affects CFP, although the correlation is stronger in the long run. Significant negative influence to risk is also discovered. However, risk has a significant adverse correlation with CFP when two years’ lagged value is used. Hence, CSR affects CFP through risk in the long-term, both directly and indirectly.

Practical implications

The empirical result suggests that CSR serves as a tool in managing the risk of enterprises and performance, especially in the long-term. Accordingly, firms should incorporate CSR as a strategic investment and manage a strong relationship with stakeholders.

Originality/value

This report expands further prior works and contributes to CSR and financial management literature by discovering the true nature of CSR effects as an investment in the future. This is the first study which tests and proves that CSR in Indonesian natural resources industry plays a significant role as a strategic risk management instrument that leads to a sustainable and long-lasting financial performance.

Details

Social Responsibility Journal, vol. 16 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

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Article

Yeonsoo Kim and Chang Wan Woo

The purpose of this paper is to examine the role of prior-CSR reputation in protecting a company’s CSR reputation during product-harm crises and how it influences…

Abstract

Purpose

The purpose of this paper is to examine the role of prior-CSR reputation in protecting a company’s CSR reputation during product-harm crises and how it influences consumers’ crisis-related behavioral intentions (i.e. supportive communication, resistance to negative information and crisis resiliency). The authors test whether the impact of prior-CSR reputation differs by crisis type as well.

Design/methodology/approach

A randomized 2 (CSR reputation: good vs bad) × 2 (product-harm crisis type: tampering vs preventable) full factorial design in two industry settings (food industry and retail industry) with consumer samples was conducted.

Findings

The results revealed the determinant role of positive prior-CSR reputation in protecting reputational assets. A company with positive CSR reputation experiences no decrease in its CSR reputation during victim crises and fairly minor decreases during preventable crises. However, a company with a bad prior-CSR reputation experiences a greater decline in its CSR reputation across both crises; the level of decline during victim crises was as substantial as the decline experienced during a preventable crisis. The prior-CSR reputation directly affects consumers’ crisis-related intentions, and indirectly does so through post-CSR reputation. As post-CSR reputation becomes more positive, consumers display greater resistance to negative information, supportive communication intent and crisis resiliency.

Originality/value

This study advances the understanding of the role of corporate reputation during crises and provides additional empirical evidence of how the buffering effect of CSR can extend beyond product-related intentions among consumers. The findings can induce companies to adopt CSR programs more systematically and proactively under a long-term strategic plan.

Details

Corporate Communications: An International Journal, vol. 24 no. 1
Type: Research Article
ISSN: 1356-3289

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Article

Hugo K.S. Lam

The purpose of this paper is to theoretically hypothesise and empirically test the impact of sustainable supply chain practices (SSCPs) on firms’ financial risk.

Abstract

Purpose

The purpose of this paper is to theoretically hypothesise and empirically test the impact of sustainable supply chain practices (SSCPs) on firms’ financial risk.

Design/methodology/approach

This research adopts signalling theory to explain the signalling role of SSCPs and the moderating role of the signalling environment in terms of supply chain characteristics. It collects and combines longitudinal secondary data from multiple sources to test the direct impact of SSCPs on firms’ financial risk and the moderating role of supply chain complexity and efficiency. It conducts various additional tests to check the robustness of the findings and to account for alternative explanations.

Findings

This research shows that SSCPs help firms reduce financial risk but do not affect their returns. Moreover, the risk reduction of SSCPs is greater for firms with more complex and efficient supply chains. The findings are robust to alternative variable measurements and analysing strategies.

Research limitations/implications

This research reveals the role of SSCPs in reducing financial risk, urging researchers to pay more attention to the financial risk implications of supply chain practices in general and SSCPs in particular.

Practical implications

This research encourages firms to engage in SSCPs to reduce financial risk and enables them to assess the urgency of their SSCPs investments in view of the complexity and efficiency of their supply chains.

Originality/value

This is the first research examining the impact of SSCPs on financial risk, based on longitudinal secondary data and signalling theory. The empirical evidence documented and the theoretical perspective adopted offer important implications for future practice and research on SSCPs.

Details

International Journal of Operations & Production Management, vol. 38 no. 12
Type: Research Article
ISSN: 0144-3577

Keywords

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Article

Duygu Turker and Y. Serkan Ozmen

This study aims to analyze how corporate social responsibility (CSR) initiatives address sustainability challenges by focusing on the congruence between process and…

Abstract

Purpose

This study aims to analyze how corporate social responsibility (CSR) initiatives address sustainability challenges by focusing on the congruence between process and outcome variables of CSR.

Design/methodology/approach

Following a theory-driven model, a content analysis was conducted on 63 award-winning social responsibility projects.

Findings

The study reveals that the adoption of a proactive approach during environmental assessment, which manifests itself in a focus on emerging sustainability challenges with a deeper interest, affects the centrality of social responsibility initiative by increasing its learning and partnership potential and leads organizations to produce radical innovations.

Practical implications

The findings provide a valuable understanding for practitioners on organizing the decision making process of CSR initiatives in order to unlock its learning potentials.

Social implications

Radically innovative projects with their higher levels of proactivity, centrality and generalizability are better than incremental ones at transferring and integrating company resources and capabilities to address emergent sustainability challenges.

Originality/value

The impact of CSR on society and nature has been a neglected area of literature. To reduce this gap, this study analyzes how the configuration of process variables shapes the outcomes of socially responsible initiatives on sustainability. It also provides a new typology on the relevance of CSR initiatives to company mission/model that can show how CSR can unlock organizational learning and innovation potentials.

Details

European Journal of Innovation Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1460-1060

Keywords

Content available
Article

Corey Fox, Phillip Davis and Melissa Baucus

The purpose of the present research is to explore the relationships between corporate social responsibility (CSR), authentic leadership and business model flexibility…

Abstract

Purpose

The purpose of the present research is to explore the relationships between corporate social responsibility (CSR), authentic leadership and business model flexibility during times of unprecedented crises.

Design/methodology/approach

The research approach in this study is conceptual. After a brief review of the literature associated with CSR, authentic leadership and business models, the authors introduce a model describing the interaction of authentic leadership and business model flexibility on CSR heterogeneity.

Findings

This research explains how firms that are led by authentic leaders and that have flexible business models will be more engaged with their stakeholders than firms with less authentic leaders or more rigid business models during unprecedented crises.

Practical implications

Prescriptions for practitioners are suggested for improving authentic leadership as well as making adaptations to the firm's business model. Regarding authentic leadership, firms can screen potential new hires and existing employees for authentic leadership qualities. Firms can also rely upon existing interventions shown to assist in authentic leadership development for current leaders. At the business model level, firms can focus on core resources and their application in related product and service markets.

Originality/value

Firms engaged in CSR activities benefit more from those activities when leaders are authentic. However, in times of unprecedented crises, business model flexibility may also dictate the extent to which firms can satisfy their stakeholders. The authors introduce a conceptual model that takes the elements of authentic leadership and business model flexibility into account to explain CSR heterogeneity.

Details

Management Decision, vol. 58 no. 10
Type: Research Article
ISSN: 0025-1747

Keywords

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Article

Guangqiang Liu, Lirang Pang and Dongmin Kong

This study aims to examine the effects of human capital, such as top managers and employees, on the relationship between export and firm innovation. Although the issue of…

Abstract

Purpose

This study aims to examine the effects of human capital, such as top managers and employees, on the relationship between export and firm innovation. Although the issue of how firms remain creative and competitive in international markets is important both in practice and in research, little attention has been devoted to the internal mechanism through which export affects innovation.

Design/methodology/approach

Using a hand-collected data set of human capital on the overseas experiences of managers and educational levels of employees as the basis, this study utilizes Chinese A-share listed firms from 2006 to 2015 to test the research questions through regression analyses.

Findings

First, export significantly enhances firm innovation. Second, different types of human capital exhibit different moderating and mediating effects. Specifically, returnee managers play positive moderating and mediating roles on the relationship between export and innovation, whereas highly educated employees exhibit negative moderating effects and no mediating effect. Third, to address potential endogeneity, the authors construct novel instrumental variables of export and human capital and use the two-stage least-squares method to identify causality.

Originality/value

This study provides direct policy implications by showing the roles of export and human capital in innovation, thereby guiding the management practices of firms and talent policies of governments.

Details

Chinese Management Studies, vol. 11 no. 2
Type: Research Article
ISSN: 1750-614X

Keywords

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