Search results

1 – 5 of 5
Per page
102050
Citations:
Loading...
Access Restricted. View access options
Article
Publication date: 13 October 2021

Marwan A. Al-Shammari, Soumendra Nath Banerjee and Abdul A. Rasheed

The authors aim to develop and test a theory of dual responsibility to explain the relationship between corporate social responsibility (CSR) and firm performance. The authors…

5673

Abstract

Purpose

The authors aim to develop and test a theory of dual responsibility to explain the relationship between corporate social responsibility (CSR) and firm performance. The authors empirically examine whether firms that meet their economic and social responsibilities simultaneously perform better than firms that fail to do so. In doing so, the authors theoretically extend and empirically test Barney's (2018) call to incorporate the stakeholder perspective with resource-based view (RBV). The authors also examine the moderating effects of firm status on this relationship.

Design/methodology/approach

The authors use a longitudinal panel sample of 137 S&P 500 firms and data for the years between 2004 and 2013 collected from multiple data sources. The authors use stochastic frontiers analysis to measure firm capabilities in the areas of R&D, operations and marketing. These capability measures are then used along with CSR measures and a measure of firm status to test the hypotheses of this study. The authors also conducted several robustness checks and various supplementary analyses using different econometrics techniques and different operationalizations of the key variables of interests.

Findings

The results show that firm CSR is positively related to firm performance and that the effect of CSR on performance is stronger for firms with higher levels of R&D capability and operational capability. The authors also find support for the three-way interaction between CSR, economic responsibility and firm status, suggesting that firms high in both social and economic responsibilities and status will enjoy the highest levels of performance.

Research limitations/implications

The findings of this study are based on large, publicly listed firms in North America. Therefore, their generalizability to other contexts and other types of firms require additional research. The reliance on KLD measures is also a limitation, especially because they have not reported CSR ratings after 2013.

Practical implications

For practicing managers, the main implication of this study is that an optimal balance between market and nonmarket strategies is key for superior performance.

Social implications

The continued debate regarding the firm's purpose can be understood by focusing equally on the two main responsibilities of firms: nonsocial responsibility and social responsibility toward all stakeholders.

Originality/value

The study answers the call to incorporate stakeholder theory into the RBV of the firm by highlighting the critical role of firm capabilities in the relationship between CSR and performance. The study also highlights the role that firm status plays in the relationship between market and nonmarket strategies and firm performance.

Details

Management Decision, vol. 60 no. 6
Type: Research Article
ISSN: 0025-1747

Keywords

Access Restricted. View access options
Article
Publication date: 19 April 2022

Marwan Ahmad Al-Shammari, Soumendra Banerjee, Tushar R. Shah, Harold Doty and Hussam Al-Shammari

In light of the conflict between scholarly findings supporting corporate social responsibility’s positive impact on corporate financial performance (CFP) versus findings showing…

756

Abstract

Purpose

In light of the conflict between scholarly findings supporting corporate social responsibility’s positive impact on corporate financial performance (CFP) versus findings showing negative impact on CFP, the academic literature has reoriented toward determining the contingency conditions that affect the underlying relationships. This paper aims to investigate two potential contingency factors, the chief executive officer’s (CEO) corporate social responsibility (CSR) expertise and board members’ CSR expertise.

Design/methodology/approach

This paper uses an unbalanced panel of archival data of 168 firms from the S&P 500 index for the period 2006–2013. The analytic model is estimated using the feasible generalized least squares regression method with heteroscedasticity and panel-specific AR1 autocorrelation.

Findings

The findings reinforce the perspective that CSR positively affects the firm’s financial performance. The authors find that firms realize optimal results from their CSR investments when both the board and the CEO have greater CSR expertise. In other words, both, CEO CSR expertise and board CSR expertise positively impact the CSR–CFP relationship.

Research limitations/implications

The findings of this study advance the literature in three important areas, namely, the social responsibility–financial responsibility relationship, the governance literature and upper echelons theory. First, the theoretical arguments and the empirical evidence highlight that CSR–CFP relationship is at least partly contingent upon the CEO’s and board members’ CSR expertise. Second, this study introduces two important variables: the CEO and board’s CSR experience as proxies for their CSR expertise. Future researchers may consider decomposing the various components of CSR to study the differential impact of each component on financial performance.

Practical implications

First, this study finds that while the CEO CSR expertise may be of value for the firm, such value can only be realized under a capable and effective board that has adequate knowledge in the field of CSR. Second, this study shows that the best-case scenario for firms occurs when both its board members and CEO have had greater prior CSR involvement that contributed to their knowledge inventory and skills. Greater knowledge and skills enhance the quality of the decisions that comprise the firm’s CSR strategy.

Originality/value

While it seems intuitive that prior CSR knowledge and expertise should lead to more and better CSR initiatives, there are few if any studies that empirically examine the effects of this premise on a firm’s financial performance. To the best of the authors’ knowledge, this study appears to be the first that directly tests the relationship between executives’ CSR experience and firm performance.

Access Restricted. View access options
Article
Publication date: 26 June 2023

Marwan A. Al-Shammari, Soumendra Nath Banerjee, Hussam Al-Shammari and Harold Doty

This study aims to investigate how the association between corporate social responsibility (CSR) and firm performance, documented in prior research, is affected by the joint…

360

Abstract

Purpose

This study aims to investigate how the association between corporate social responsibility (CSR) and firm performance, documented in prior research, is affected by the joint effects of managerial ability and attributes of the firm's governance structure.

Design/methodology/approach

Unbalanced panel contains the essence of cross-sectional time-series data. A significant F-test proves the inappropriateness of pooled OLS regression to the sample. Further, the rejection of the Hausman test null favors fixed-effects over random-effects. However, statistically significant results from Shapiro–Wilk test, Breusch–Pagan test and Wooldridge test reveal non-normal distribution of the dependent variable, the presence of heteroscedasticity and the existence of first-order autocorrelation, respectively. Thus, this study applies feasible generalized least squares with panel-specific autocorrelation structure (hence, a slightly smaller sample) controlling for heteroskedasticity to all models after lagging all the explanatory variables by a year.

Findings

This study finds that higher levels of managerial ability enable firms to benefit more/less from their CSR investments depending on the presence/absence of appropriate governance devices. While CEO ability may be seen as an indicator of how well the CEO might serve the firm in the market-domain strategies, the results suggest that this may not be the case in the non-market domain in the absence of appropriate governance mechanisms.

Originality/value

The arguments and analyses in this study support two important contributions to the growing literature on CSR. First, the current study is one of the few to identify CEO ability as an important factor that may influence the dynamics of the firm's CSR (see also Garcì-Sànchez et al., 2019 and Yuan et al., 2019). Second, this study examines whether governance robustness minimizes the potential for opportunistic behavior of more able CEOs or constraints the effectiveness of more able CEOs in decisions pertaining to CSR.

Details

Management Decision, vol. 61 no. 7
Type: Research Article
ISSN: 0025-1747

Keywords

Access Restricted. View access options
Article
Publication date: 7 February 2022

Marwan A. Al-Shammari, Hussam Al-Shammari and Soumendra Nath Banerjee

The purpose of the current study is to revisit the relationship between CSR and firm market performance. The authors examine whether a gap between the firm's internal and external…

1316

Abstract

Purpose

The purpose of the current study is to revisit the relationship between CSR and firm market performance. The authors examine whether a gap between the firm's internal and external CSR moderates the CSR-firm market performance relationship. Additionally, the authors propose that the moderating effect of the CSR gap on this relationship is mediated by firm visibility.

Design/methodology/approach

The initial sample is the Fortune 500 firms during the years 2004–2013. The final panel data sample consisted of 1,300 firms and 6,128 observations from 2004 to 2013. The authors obtained data from five different sources: Compustat North America Fundamental Annual, GMI Ratings, Execucomp, IBES and KLD Stats.

Findings

The results of this research find evidence that both internal CSR and external CSR were positively related to firm market performance, but that the relationship was stronger for firms with equal emphasis on external and internal CSR activities. Furthermore, the negative moderating effect of the CSR gap was mediated by the firm visibility.

Originality/value

The findings of the study advance our understanding of the CSR-FP relationship. First, the theoretical arguments and the empirical evidence highlight that the CSR-FP relationship exists and that its magnitude is contingent upon the gap between internal and external CSR investments. Second, the authors enhanced theoretical understanding of how and why CSR relates to firm performance by exploring firm visibility as a mediator. Specifically, the authors introduced firm visibility as a mechanism which explains the effect of the interaction of overall CSR with the CSR gap on firm performance.

Details

Management Decision, vol. 60 no. 6
Type: Research Article
ISSN: 0025-1747

Keywords

Access Restricted. View access options
Article
Publication date: 15 January 2020

Malavika Nair and Martha Njolomole

The purpose of this paper is to consider the success and failure of microfinance institutions in generating economic growth over the past 30 years and propose a dual criterion of…

548

Abstract

Purpose

The purpose of this paper is to consider the success and failure of microfinance institutions in generating economic growth over the past 30 years and propose a dual criterion of evaluation.

Design/methodology/approach

It surveys the empirical literature on microfinance and finds that while there has been small and localized success in various countries in improving access to credit, at the same time there has been a broader failure to generate economic growth. The authors argue that this broader failure should be viewed from the viewpoint of institutional failure or the lack of supporting institutions such as private property rights and stable rule of law within developing countries.

Findings

Using Baumol’s (1968) theory of entrepreneurship, the authors argue that the broader failure of microfinance is a case of poor institutional quality leading to unproductive or even destructive entrepreneurship rather than productive entrepreneurship. The paper also suggests a link between the literature criticizing foreign aid and this view on microfinance.

Originality/value

The paper provides a survey of the empirical literature on micro finance as well as a novel framework that aids in understanding both the localized small-scale success as well as broader failure to generate economic growth.

Details

Journal of Entrepreneurship and Public Policy, vol. 9 no. 1
Type: Research Article
ISSN: 2045-2101

Keywords

1 – 5 of 5
Per page
102050