Speaking of Corporate Social Responsibility

48 Pages Posted: 5 Mar 2014 Last revised: 12 Mar 2014

Hao Liang

Singapore Management University, Lee Kong Chian School of Business; Tilburg University, CentER

Christopher Marquis

Cornell University; Harvard University - Harvard Kennedy School (HKS)

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 - Institute for Entrepreneurship and Innovation

Multiple version iconThere are 2 versions of this paper

Date Written: March 2, 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.

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

JEL Classification: G3, Z10, Z11, G28

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: https://ssrn.com/abstract=2403878 or http://dx.doi.org/10.2139/ssrn.2403878

Hao Liang

Singapore Management University, Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://business.smu.edu.sg/faculty/profile/130396/LIANG-Hao

Tilburg University, CentER ( email )

Netherlands

Christopher Marquis (Contact Author)

Cornell University ( email )

363 Sage Hall
Ithaca, NY 14853
United States

HOME PAGE: http://www.chrismarquis.com

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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 - Institute for Entrepreneurship and Innovation ( email )

Kansas City, MO 84110
United States

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