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http://ssrn.com/abstract=2403878
 
 

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Speaking of Corporate Social Responsibility


Hao Liang


Tilburg University, CentER

Christopher Marquis


Harvard University

Luc Renneboog


Tilburg University - Department of Finance; European Corporate Governance Institute (ECGI); Tilburg Law and Economics Center (TILEC)

Sunny Li Sun


University of Missouri at Kansas City

March 2, 2014

Harvard Business School Organizational Behavior Unit Working Paper No. 14-082
European Corporate Governance Institute (ECGI) - Finance Working Paper No. 412/2014

Abstract:     
We argue that the language spoken by corporate decision makers influences their firms’ social responsibility and sustainability practices. Linguists suggest that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future. Prior research has shown that speakers of strong FTR languages (such as English, French, and Spanish) exhibit less future-oriented behavior (Chen, 2013). Yet, research has not established how this mechanism may affect the future-oriented activities of corporations. We theorize that companies with strong-FTR languages as their official/working language would have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR) compared to those in weak-FTR language environments. Examining thousands of global companies across 59 countries from 1999-2011, we find support for our theory, and further that the negative association between FTR and CSR performance is weaker for firms that have greater exposure to diverse global languages as a result of (a) being headquartered in countries with higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. Our results suggest that language use by corporations is a key cultural variable that is a strong predictor of CSR and sustainability.

Number of Pages in PDF File: 48

Keywords: Language, Future-Time-Reference, Categories, Culture, Corporate Social Responsibility, Sustainability

JEL Classification: G3, Z10, Z11, G28

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Date posted: March 5, 2014 ; Last revised: March 12, 2014

Suggested Citation

Liang, Hao and Marquis, Christopher and Renneboog, Luc and Sun, Sunny Li, Speaking of Corporate Social Responsibility (March 2, 2014). Harvard Business School Organizational Behavior Unit Working Paper No. 14-082 ; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 412/2014 . Available at SSRN: http://ssrn.com/abstract=2403878 or http://dx.doi.org/10.2139/ssrn.2403878

Contact Information

Hao Liang
Tilburg University, CentER ( email )
Netherlands
Christopher Marquis (Contact Author)
Harvard University ( email )
Boston, MA 02163
United States
617-496-4614 (Phone)
HOME PAGE: http://www.chrismarquis.com
Luc Renneboog
Tilburg University - Department of Finance ( email )
P.O. Box 90153
Warandelaan 2
5000 LE Tilburg
Netherlands
+13 31 466 8210 (Phone)
+13 31 466 2875 (Fax)
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Tilburg Law and Economics Center (TILEC)
Warandelaan 2
Tilburg, 5000 LE
Netherlands
Sunny Li Sun
University of Missouri at Kansas City ( email )
5100 Rockhill Road
Kansas City, MO 64110-2499
United States
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