A Stakeholder Resource-based View of Corporate Social Irresponsibility: Evidence from China

Academy of Management Proceedings 2019 (1), 10425

44 Pages Posted: 10 Jun 2020 Last revised: 25 Feb 2021

See all articles by Maretno A. Harjoto

Maretno A. Harjoto

Pepperdine University - Pepperdine Graziadio Business School (PGBS)

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin; European Commission's Platform on Sustainable Finance

Qian Li

Cardiff Business School, Cardiff University

Date Written: September 18, 2018

Abstract

Following stakeholder resource-based view (SRBV), we conceptualize the value relevance of corporate social irresponsibility (CSI) based on the bargaining power of stakeholders’ economic claims over firms’ inputs and revenue generations, and classify the stakeholders into residual claimants (i.e. customers, shareholders) and fixed claimants (i.e. employees, environment). Using a curated detailed news data of 816 CSI episodes and 56,503 Chinese government daily publications from June 2006 to July 2012, we find that CSI episodes alienating residual claimants’ stakeholders lead to greater shareholder value destruction. The results suggest that CSI episodes alienating high legitimacy claims of shareholders and customers, high urgency claims of employees and powerful claims of customers result in a more pronounced underperformance. Although there are potentially overlapping boundaries between fixed and residual claimants under special circumstances, the findings provide implications for firms making strategic decisions involving multiple stakeholders.

Keywords: Corporate Social Irresponsibility (CSI); Corporate Social Responsibility (CSR); Stakeholder Resource-based Theory; Stakeholder Salience; Environmental, Social and Governance (ESG) risks; Shareholder Value

JEL Classification: G20; M14; G29

Suggested Citation

Harjoto, Maretno Agus and Hoepner, Andreas G. F. and Li, Qian, A Stakeholder Resource-based View of Corporate Social Irresponsibility: Evidence from China (September 18, 2018). Academy of Management Proceedings 2019 (1), 10425, Available at SSRN: https://ssrn.com/abstract=3241981 or http://dx.doi.org/10.2139/ssrn.3241981

Maretno Agus Harjoto

Pepperdine University - Pepperdine Graziadio Business School (PGBS) ( email )

Drescher Campus Suite 344
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Malibu, CA 90263
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HOME PAGE: http://scholar.google.com/citations?hl=en&user=9-PfQi0AAAAJ

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin ( email )

Blackrock, Co. Dublin
Ireland

European Commission's Platform on Sustainable Finance ( email )

2 Rue de Spa
Brussels, 1000
Belgium

Qian Li (Contact Author)

Cardiff Business School, Cardiff University ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

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