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Instrumental Stakeholder Theory in Turbulent Environments: An Empirical Testing using Political and Social Donations

Author

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  • Rosilene Marcon

    (University of Vale do Itajaí – UNIVALI)

  • Rodrigo Bandeira de Mello

    (University of Vale do Itajaí – UNIVALI)

  • Anete Alberton

    (University of Vale do Itajaí – UNIVALI)

Abstract

In this paper we empirically tested the instrumental stakeholder theory using firm donation to government and to community as proxy for stakeholder relationship intensity. Two models were applied to a sample of 339 publicly traded firms in Brazil using different performance indicators. In the first model, a multiple regression model estimated the effects of establishing political and social stakeholder relations on firm performance, by comparing donating firms to a control group of non-donating firms. The second model used structural equation modeling to test the mediating effects of stakeholder relationship intensity between firm and industry-level stakeholder orientations and performance on donating firms. In both tested models, our results indicate that instrumental theory hypothesis did not hold for our data. However, findings suggest that the market perceives stakeholder management as a firm cost, and that stakeholder relationship intensity can be explained by a one-dimension construct, measured by firm level indicators that describe the organizational context.

Suggested Citation

  • Rosilene Marcon & Rodrigo Bandeira de Mello & Anete Alberton, 2008. "Instrumental Stakeholder Theory in Turbulent Environments: An Empirical Testing using Political and Social Donations," Brazilian Business Review, Fucape Business School, vol. 5(3), pages 275-293, September.
    • Handle: RePEc:bbz:fcpbbr:v:5:y:2008:i:3:p:275-293
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    References listed on IDEAS

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    2. Roberts, Robin W., 1992. "Determinants of corporate social responsibility disclosure: An application of stakeholder theory," Accounting, Organizations and Society, Elsevier, vol. 17(6), pages 595-612, August.
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