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Can country trade flows benefit from improved corporate social responsibility ratings?

Author

Listed:
  • Yang, Shou-Lin
  • Chang, Ariana
  • Chen, Yen-Hsun
  • Shiu, Yung-Ming

Abstract

We set out in this study to examine the effects of country ‘corporate social responsibility’ (CSR) ratings on the international trade flows of 28 countries. Drawing on categorization theory, we examine whether country CSR engagement is a categorizing factor capable of influencing the overall process of categorization. Based upon a two-stage approach, comprising of gravity and panel Tobit models, we find that a country's CSR rating has significantly positive effects on the country's international trade flows. When the CSR rating of a country is higher than that of another rival trading country, this will have significantly positive effects on the bilateral trade flows between the two countries.

Suggested Citation

  • Yang, Shou-Lin & Chang, Ariana & Chen, Yen-Hsun & Shiu, Yung-Ming, 2019. "Can country trade flows benefit from improved corporate social responsibility ratings?," Economic Modelling, Elsevier, vol. 80(C), pages 192-201.
    • Handle: RePEc:eee:ecmode:v:80:y:2019:i:c:p:192-201
    DOI: 10.1016/j.econmod.2018.11.007
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    Citations

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    Cited by:

    1. Anthony Goerzen & Michael Sartor & Kristin Brandl & Stacey Fitzsimmons, 2023. "Widening the lens: Multilevel drivers of firm corporate social performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 42-60, February.
    2. Yunhe Li & Xinyi Shen & Fang Zhang, 2024. "The effects of heterogeneous CSR on corporate stock performance: evidence from COVID-19 pandemic in China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    3. Boubaker, Sabri & Cellier, Alexis & Manita, Riadh & Saeed, Asif, 2020. "Does corporate social responsibility reduce financial distress risk?," Economic Modelling, Elsevier, vol. 91(C), pages 835-851.
    4. Huayun Zhai & Mingsheng Xiao & Kam C. Chan & Qingzhuo Liu, 2022. "Physical proximity, corporate social responsibility, and the impact of negative investor sentiment on stock returns: Evidence from COVID‐19 in China," International Review of Finance, International Review of Finance Ltd., vol. 22(2), pages 308-314, June.
    5. Kong, Dongmin & Cheng, Xu & Jiang, Xiandeng, 2021. "Effects of political promotion on local firms’ social responsibility in China," Economic Modelling, Elsevier, vol. 95(C), pages 418-429.

    More about this item

    Keywords

    Trade flows; Corporate social responsibility; Gravity model; Panel Tobit model;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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