Speaking of Corporate Social Responsibility

TILEC Discussion Paper No. 2014-018

CentER Discussion Paper Series No. 2014-023

43 Pages Posted: 20 Mar 2014 Last revised: 1 May 2014

See all articles by Hao Liang

Hao Liang

Singapore Management University - Lee Kong Chian School of Business

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 Massachusetts Lowell

Multiple version iconThere are 2 versions of this paper

Date Written: March 19, 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 19, 2014). TILEC Discussion Paper No. 2014-018; CentER Discussion Paper Series No. 2014-023. Available at SSRN: https://ssrn.com/abstract=2411482 or http://dx.doi.org/10.2139/ssrn.2411482

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

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 Massachusetts Lowell ( email )

72 University Ave.
Lowell, MA 01854
United States

HOME PAGE: http://https://scholar.google.com/citations?user=c-Covi4AAAAJ&hl

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