The B Corporation Certification: An Institutional Theory Approach
36 Pages Posted: 11 Oct 2018
Date Written: September 19, 2018
Drawing from institutional isomorphism, gender socialization theory, the ethics of care, and social identity theory, we examine the impact of geographic locality, product market competitions, and owners’ demographic characteristics on a firm’s decision to be a certified B Corporation. Using two sets of data: a hand-collected sample of 743 small businesses receiving a B Corporation certification between 2007 and 2014 and a sample of 902 firms participating in a B Lab survey from 2011 to 2013, we examine factors that influence firms’ decision to obtain the B Corporation and their environment, social, and governance (ESG) performance. Firms in states that are Democratic-leaning, have a lower hourly wage rate, or have a greater religious population are more likely to be early adopters and leaders of the B Corporation movement than those in other states. On average, states with a higher unemployment rate and more democratic-leaning voters have more B Corporation certified firms in each year and over the years. Additionally, product market competition is positively associated with firms’ likelihood of obtaining B Corporation certification and their ESG scores.
Keywords: B Corporation, Institutional Isomorphism, Locality, Product Market Competition, Gender, CSR
JEL Classification: L31, M14, G30, O35
Suggested Citation: Suggested Citation