National Culture and the Value Implications of Corporate Social Responsibility

96 Pages Posted: 8 Oct 2018

See all articles by Dale W. Griffin

Dale W. Griffin

University of British Columbia (UBC) - Division of Marketing

Omrane Guedhami

University of South Carolina - Moore School of Business

Kai Li

University of British Columbia (UBC) - Sauder School of Business; China Academy of Financial Research (CAFR)

Guangli Lu

University of British Columbia, Sauder School of Business

Date Written: January 22, 2019

Abstract

We examine why corporate social responsibility (CSR) practices vary across countries and firms, and the value implications of such variation. We find individualism is positively associated with firm-level CSR practices, with one country-level channel—income inequality—and two firm-level channels—board diversity and corporate transparency—linking individualism to CSR. Both between and within countries, we find a positive association between firm-level CSR practices and value, with three firm-level channels—cash flow, cash flow variability, and cost of equity—linking CSR practices to firm value. The positive association between firm-level CSR practices and value is stronger in more individualistic countries.

Keywords: corporate social responsibility; firm value; hierarchical linear model; individualism; national culture; environmental performance; social performance

JEL Classification: G18; G31; G32

Suggested Citation

Griffin, Dale W. and Guedhami, Omrane and Li, Kai and Lu, Guangli, National Culture and the Value Implications of Corporate Social Responsibility (January 22, 2019). Available at SSRN: https://ssrn.com/abstract=3250222 or http://dx.doi.org/10.2139/ssrn.3250222

Dale W. Griffin

University of British Columbia (UBC) - Division of Marketing ( email )

Canada

Omrane Guedhami

University of South Carolina - Moore School of Business ( email )

Columbia, SC
United States

Kai Li (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
604-822-8353 (Phone)
604-822-4695 (Fax)

HOME PAGE: http://finance.sauder.ubc.ca/~kaili

China Academy of Financial Research (CAFR)

1954 Huashan Road
Shanghai P.R.China, 200030
China

Guangli Lu

University of British Columbia, Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
6045069229 (Phone)

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