Corporate governance and performance in socially responsible corporations: New empirical insights from a neo-institutional framework
Corporate governance and performance in socially responsible corporations: New empirical insights from a neo-institutional framework
Research Question/Issue:
This paper investigates the relationship between corporate governance (CG) and corporate social responsibility (CSR), and consequently, examines whether CG can positively moderate the association between corporate financial performance (CFP) and CSR.
Research Findings/Insights:
Using a sample of large listed corporations from 2002 to 2009, we find that, on average, better-governed corporations tend to pursue a more socially responsible agenda through increased CSR practices. We also find that a combination of CSR and CG practices has a stronger positive effect on CFP than CSR alone, implying that CG positively influences the CFP-CSR relationship. Our results are robust to controlling for different types of endogeneities, as well as alternative CFP, CG and CSR proxies.
Theoretical/Academic Implications:
The paper generally contributes to the literature on CG, CSR and CFP. Specifically, we make two main new contributions to the extant literature by drawing on new insights from an overarching neo-institutional framework. First, we show why and how better-governed corporations are more likely to pursue a more socially responsible agenda. Second, we provide evidence on why and how CG might strengthen the link between CFP and CSR.
Practical/Policy Implications:
Our findings have important implications for corporate regulators and policy-makers. Since our evidence suggests that better-governed corporations are more likely to be more socially responsible with a consequential positive effect on CFP, it provides corporate regulators, managers and policy-makers with a new impetus to develop a more explicit agenda of jointly pursuing CG and CSR reforms, instead of merely considering CSR as a peripheral component of CG or as an independent corporate activity.
Keywords: Corporate Governance, Corporate Social Responsibility, Corporate Financial Performance, Neo-Institutional Theory
corporate governance, corporate social responsibility, corporate financial performance, neo-institutional theory
468-494
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Soobaroyen, Teerooven
6686e2f8-564f-4f7f-b079-9dc8a2f53a48
3 September 2013
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Soobaroyen, Teerooven
6686e2f8-564f-4f7f-b079-9dc8a2f53a48
Ntim, Collins G. and Soobaroyen, Teerooven
(2013)
Corporate governance and performance in socially responsible corporations: New empirical insights from a neo-institutional framework.
[in special issue: Corporate Social Responsibility, Institutional Structures and Corporate Governance]
Corporate Governance: An International Review, 21 (5), .
(doi:10.1111/corg.12026).
Abstract
Research Question/Issue:
This paper investigates the relationship between corporate governance (CG) and corporate social responsibility (CSR), and consequently, examines whether CG can positively moderate the association between corporate financial performance (CFP) and CSR.
Research Findings/Insights:
Using a sample of large listed corporations from 2002 to 2009, we find that, on average, better-governed corporations tend to pursue a more socially responsible agenda through increased CSR practices. We also find that a combination of CSR and CG practices has a stronger positive effect on CFP than CSR alone, implying that CG positively influences the CFP-CSR relationship. Our results are robust to controlling for different types of endogeneities, as well as alternative CFP, CG and CSR proxies.
Theoretical/Academic Implications:
The paper generally contributes to the literature on CG, CSR and CFP. Specifically, we make two main new contributions to the extant literature by drawing on new insights from an overarching neo-institutional framework. First, we show why and how better-governed corporations are more likely to pursue a more socially responsible agenda. Second, we provide evidence on why and how CG might strengthen the link between CFP and CSR.
Practical/Policy Implications:
Our findings have important implications for corporate regulators and policy-makers. Since our evidence suggests that better-governed corporations are more likely to be more socially responsible with a consequential positive effect on CFP, it provides corporate regulators, managers and policy-makers with a new impetus to develop a more explicit agenda of jointly pursuing CG and CSR reforms, instead of merely considering CSR as a peripheral component of CG or as an independent corporate activity.
Keywords: Corporate Governance, Corporate Social Responsibility, Corporate Financial Performance, Neo-Institutional Theory
Text
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- Accepted Manuscript
More information
e-pub ahead of print date: 5 May 2013
Published date: 3 September 2013
Keywords:
corporate governance, corporate social responsibility, corporate financial performance, neo-institutional theory
Organisations:
Centre of Excellence for International Banking, Finance & Accounting, Accounting
Identifiers
Local EPrints ID: 349810
URI: http://eprints.soton.ac.uk/id/eprint/349810
ISSN: 0964-8410
PURE UUID: ff0a43c2-df4d-48c8-96f4-65ff82f4dfc3
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Date deposited: 12 Mar 2013 09:15
Last modified: 15 Mar 2024 03:35
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Contributors
Author:
Teerooven Soobaroyen
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