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Economic resources and corporate social responsibility

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  • Sun, Xian
  • Gunia, Brian C.

Abstract

Our research suggests that firms condition their CSR policies on the availability of economic resources. Using the value of a firm's real estate as a measure of exogenous shocks on the firm's economic resources, we show that increases in resources reduce CSR concerns, while decreases in resources increase CSR concerns. The relative impact of resource availability on CSR concerns, however, depends on several organizational variables that influence a firm's preferences for CSR investments. Furthermore, we show that firm reactions to increases and decreases in resources are not symmetric: resource gains reduce CSR concerns, but resource losses increase CSR concerns even more markedly. Overall, these results suggest that firms may treat CSR decisions in much the same way as other investment decisions.

Suggested Citation

  • Sun, Xian & Gunia, Brian C., 2018. "Economic resources and corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 51(C), pages 332-351.
    • Handle: RePEc:eee:corfin:v:51:y:2018:i:c:p:332-351
    DOI: 10.1016/j.jcorpfin.2018.06.009
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    9. Vraňaková Natália & Stareček Augustín & Koltnerová Kristína & Cagáňová Dagmar & Chlpeková Andrea & Saniuk Sebastian, 2019. "Discrimination of Employees Generational Groups in Selected Human Resource Management Areas," Research Papers Faculty of Materials Science and Technology Slovak University of Technology, Sciendo, vol. 27(s1), pages 84-92, December.
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    More about this item

    Keywords

    Corporate social responsibility; Prospect theory; Firm resources; Corporate governance; Real estate value;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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