Mind the Gap: The Interplay Between Internal and External Actions in the Case of Corporate Social Responsibility
Boston University School of Management
London Business School
July 2, 2014
We explore the effect of the interplay between a firm’s internal and external actions on performance in the context of corporate social responsibility (CSR). Drawing from the neo-institutional theory, we argue that internal and external CSR actions jointly contribute to the accumulation of intangible firm resources and therefore are associated with better performance. Importantly, though, we theorize that a wider gap between internal and external actions — one reflecting more “talk” and less “action” by firms — negatively affects performance. Empirically, we use the market-value equation and a sample comprising 1,987 firms in 43 countries from 2002 to 2008. We find support for our hypotheses in the main analyses and robustness tests addressing potential endogeneity. We discuss implications for future research and practice.
Number of Pages in PDF File: 41
Keywords: corporate social responsibility (CSR), firm performance, legitimacy, internal and external actions, market-value equation
JEL Classification: M10, M14working papers series
Date posted: July 6, 2012 ; Last revised: July 3, 2014
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