The B Corporation Certification: An Institutional Theory Approach

36 Pages Posted: 11 Oct 2018

See all articles by Maretno A. Harjoto

Maretno A. Harjoto

Pepperdine University - Pepperdine Graziadio Business School (PGBS)

Indrarini Laksmana

Kent State University - Department of Accounting

Ya-Wen Yang

Wake Forest University - Schools of Business

Date Written: September 19, 2018

Abstract

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

Harjoto, Maretno Agus and Laksmana, Indrarini and Yang, Ya-Wen, The B Corporation Certification: An Institutional Theory Approach (September 19, 2018). Available at SSRN: https://ssrn.com/abstract=3252150 or http://dx.doi.org/10.2139/ssrn.3252150

Maretno Agus Harjoto (Contact Author)

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

Drescher Campus Suite 344
24255 Pacific Coast Highway
Malibu, CA 90263
United States
(310) 506-8542 (Phone)
(310) 506-4126 (Fax)

HOME PAGE: http://scholar.google.com/citations?hl=en&user=9-PfQi0AAAAJ

Indrarini Laksmana

Kent State University - Department of Accounting ( email )

P.O. Box 5190
Kent, OH 44242-0001
United States

Ya-Wen Yang

Wake Forest University - Schools of Business ( email )

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States
336-758-2934 (Phone)

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