Trade Shocks and the Role of Stakeholder Preference in Corporate Social Responsibility

61 Pages Posted: 18 Jul 2017 Last revised: 24 Aug 2020

See all articles by Shantanu Banerjee

Shantanu Banerjee

Lancaster University - Management School

Swarnodeep HomRoy

University of Groningen

Aurélie Slechten

Lancaster University

Date Written: August 09, 2020

Abstract

This paper investigates the role of stakeholder preference on corporate social responsibility (CSR). We find that Indian firms increase CSR expenses when trade restrictions (Antidumping) are initiated against competing Chinese exports from countries with a high stakeholder preference for CSR. However, when these shocks emanate from countries with a lower stakeholder preference, CSR expenses remain unchanged. Capital investments and R&D of Indian firms increase due to the same shocks, irrespective of their country of origin. Finally, CSR increases firm value only when the demand shocks originate from countries with a higher CSR preference. Collectively, our results provide empirical evidence of investment motives for CSR.

Keywords: Corporate social responsibility, Trade, Anti-dumping, India.

JEL Classification: D22, O12, M14, G32

Suggested Citation

Banerjee, Shantanu and HomRoy, Swarnodeep and Slechten, Aurélie, Trade Shocks and the Role of Stakeholder Preference in Corporate Social Responsibility (August 09, 2020). Available at SSRN: https://ssrn.com/abstract=3000603 or http://dx.doi.org/10.2139/ssrn.3000603

Shantanu Banerjee

Lancaster University - Management School ( email )

Lancaster, Lancashire LA1 4YX
United Kingdom

Swarnodeep HomRoy (Contact Author)

University of Groningen ( email )

Nettlebosje 2
Department of Economics, Econometrics and Finance
Groningen, Groningen 9747 AE
Netherlands

Aurélie Slechten

Lancaster University ( email )

Lancaster LA1 4YX
United Kingdom

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