Strategic CSR in Family Firms

Abstract

This paper explores the influence of family ownership on corporate social responsibility (CSR) performance using a comprehensive dataset of 24,531 firm-year observations in the U.S. We find that family firms exhibit superior CSR performance compared to non-family firms, driven by their focus on averting concerns rather than initiating positive social initiatives. Moreover, the positive relation between family ownership and CSR is stronger for family firms with lower cash holdings, stronger governance, and higher profitability. Our study also shows that family firms excel or match non-family firms in every CSR dimension, strategically prioritizing activities that ensure business longevity. Out study highlight the strategic role of family succession in shaping CSR orientation, indicating family firms’ motive for long-term survival as a key factor. Overall, our findings shed new light on the intricate CSR decisions of family firms and offer significant insights into their CSR behavior.

Keywords: CSR, Family firm, Family sustainability, Strategic investment

JEL Classification: G32, G34, M14, D22