Does CSR reputation mitigate the impact of corporate social irresponsibility?
- PDF / 703,802 Bytes
- 25 Pages / 439.37 x 666.142 pts Page_size
- 89 Downloads / 216 Views
Does CSR reputation mitigate the impact of corporate social irresponsibility? Meijui Sun1 · Ming‑Chang Huang2 Received: 14 November 2019 / Revised: 10 August 2020 / Accepted: 31 August 2020 © Springer Nature Limited 2020
Abstract This study investigates the valuation and performance effects of corporate social responsibility (CSR) and irresponsibility (CSiR) activities adopted by 72 CSRawarded and 87 nonawarded listed firms in Taiwan. Focusing on 1368 CSR/CSiR events during 2008–2011, this study provides an overview and a comparison of CSR/CSiR activities in an emerging Asian economy and focuses on the reputation and buffering effects of CSiR events. The results show that CSR activities are accompanied by improved performance. Compared with nonawarded firms, when CSR-awarded firms experience CSiR events, their investors impose stricter punishments. Consequently, the performance of CSR-awarded firms is inferior to that of nonawarded firms. This empirical work shows that firms with high CSR reputations are not buffered from the consequences of scandal and clarifies the incongruent and mixed findings regarding the CSR–performance relationship in the existing literature. Keywords Corporate social responsibility (CSR) · Corporate social irresponsibility (CSiR) · Moral capital · Moral liability · Corporate performance · Reputation · Event study
* Meijui Sun [email protected] Ming‑Chang Huang [email protected] 1
Department of International Business, School of Management, Ming Chuan University, 250, Sec. 5, Zhong Shan N. Rd., Taipei 11103, Taiwan
2
Department of Business Administration, College of Management, National Yunlin University of Science and Technology, 123, Sec. 3, University Rd., Douliou 64002, Yunlin, Taiwan
Vol.:(0123456789)
M. Sun, M.-C. Huang
Introduction Corporate social responsibility (CSR), which indicates activities in which a firm works with stakeholders and voluntarily incorporates social and environmental issues into its business model and operations beyond its typical interests and legal requirements (Ioannou and Serafeim 2015; Janney and Gove 2011; Perrini et al. 2012), has become a global trend and has received considerable academic interest. The crucial premise for creating a positive link between CSR and firm performance is advancing the firm’s CSR reputation, a key source of moral capital that creates moral legitimacy and a stable corporate identity among various stakeholders (Li et al. 2019; Matten and Moon 2020). Over the past several decades, a growing number of studies have focused on the insurance-like effect of CSR reputation that buffers the impact of a firm’s wrongdoing and preserves financial performance during difficult times (Bae et al. 2020; Godfrey 2005; Godfrey et al. 2009; Gong et al. 2020; Janney and Gove 2011; Lenz et al. 2017; Li et al. 2019; Sepinwall 2015; Shiu and Yang 2017). The risk management perspective on CSR advocates that a high CSR reputation can partially buffer a firm from scandal (e.g., Godfrey et al. 2009; Janney and Gove 2011) or exemp
Data Loading...
