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
Date Written: September 18, 2018
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
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