The Pressure Behind Corporate Social Performance: Ownership and Institutional Configurations

Global Strategy Journal, Forthcoming

46 Pages Posted: 3 Sep 2020

See all articles by Kurt A. Desender

Kurt A. Desender

Universidad Carlos III de Madrid

Mircea Epure

Universitat Pompeu Fabra - Department of Economics and Business; Barcelona Graduate School of Economics (Barcelona GSE)

Date Written: July 24, 2020

Abstract

Research summary: Drawing on the “varieties of capitalism” literature, we develop an actor-centered framework that explains firm-level corporate social performance (CSP) by emphasizing the importance of considering owners’ and other stakeholders’ motives towards CSP — which can be instrumental, relational or moral — and their salience in the national institutional setting. Results from an international panel show that investment company (government) ownership has a stronger negative (positive) relationship with CSP in liberal markets, in which owners are the key stakeholder, as compared to coordinated markets, which counterbalance the interests of multiple stakeholders. Family and company ownership have weaker links to CSP across institutional settings. We discuss implications for research and practice and argue that CSP policies may hold more relevance in liberal rather than coordinated market economies.

Managerial summary: Existing debates focus on the impact of corporate social performance (CSP) on firm outcomes. Less is known about the motives and pressures behind CSP, which may explain its variability across firms and institutional settings. We argue that powerful owners’ motives are important for explaining CSP in liberal markets, where shareholders are the most important stakeholder, as compared to coordinated markets, which confer prominence to multiple stakeholders. Owners’ motives are not homogeneous and depending on the type of owners the link between ownership concentration and CSP can be negative (for investment companies) or positive (for governments). In coordinated markets, owners have a weaker impact on CSP, which is mostly attributable to their lower salience relative to stakeholders, rather than to a change in their motives.

Keywords: corporate governance, corporate social performance, ownership, stakeholders, institutions

JEL Classification: G34, M1, M14, M4, F23

Suggested Citation

Desender, Kurt A. and Epure, Mircea, The Pressure Behind Corporate Social Performance: Ownership and Institutional Configurations (July 24, 2020). Global Strategy Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3671618 or http://dx.doi.org/10.2139/ssrn.3671618

Kurt A. Desender

Universidad Carlos III de Madrid ( email )

Calle de Madrid, 123
Getafe, 28903
Spain

Mircea Epure (Contact Author)

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

HOME PAGE: http://mirceaepure.com

Barcelona Graduate School of Economics (Barcelona GSE)

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

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