Strategic Use of CSR as a Signal for Good Management

28 Pages Posted: 3 Jun 2008

See all articles by Anil Akpinar

Anil Akpinar

Fundación Instituto de Empresa, S.L.

Yiyi Jiang

Fundación Instituto de Empresa, S.L.

Luis R. Gomez-Mejia

Arizona State University (ASU) - Management Department

Pascual Berrone

IESE Business School - University of Navarra

Judith L. Walls

University of Michigan at Ann Arbor

Abstract

More than thirty years of research exploring the link between corporate social responsibility (CSR) and corporate financial performance (CFP) could not provide a satisfying resolution to the tension exists between economic and social objectives. In this paper, we have contributed to the existing CSR literature both theoretically and empirically. On the theoretical side, we challenged the assumption that managers consider all stakeholders equally important and we contend that managers prioritize stakeholders instead. We also extend agency theory by suggesting that CSR may actually reduce monitoring costs since it has informative value about the quality of management. On the empirical side, we proposed a stakeholder-weighted CSR which will alleviate the "stakeholder misalignment" problem which is articulated to be one of the reasons why there are inconclusive results about the relationship between CSR and CFP.

Keywords: Corporate social responsibility, corporate financial performance, stakeholder-agency theory

Suggested Citation

Akpinar, Anil and Jiang, Yiyi and Gomez-Mejia, Luis R. and Berrone, Pascual and Walls, Judith L., Strategic Use of CSR as a Signal for Good Management. Available at SSRN: https://ssrn.com/abstract=1134505 or http://dx.doi.org/10.2139/ssrn.1134505

Anil Akpinar (Contact Author)

Fundación Instituto de Empresa, S.L. ( email )

Serrano 99
Madrid, 28006
Spain

Yiyi Jiang

Fundación Instituto de Empresa, S.L. ( email )

Serrano 99
Madrid, 28006
Spain

Luis R. Gomez-Mejia

Arizona State University (ASU) - Management Department ( email )

Tempe, AZ 85287-4006
United States

Pascual Berrone

IESE Business School - University of Navarra ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

HOME PAGE: http://wwwapp.iese.edu/faculty/facultyDetail_dev.asp?lang=es&prof=pb

Judith L. Walls

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

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