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New Insights on Corporate SocialResponsibility and Country-level Institutions in Western Europe

Author

Listed:
  • Karim Ben Khediri

    (Université Paris Ouest Nanterre La Défense
    Najran University
    KSA and FSEG Nabeul
    University of Carthage)

  • Souad Lajili Jarjir

    (Université Paris-Est)

Abstract

We investigate the relationship between Corporate Social Performance (CSP) and countrylevel institutions for a sample of Western European firms from 13 countries over the period 2003 to 2010. We consider five different institutional factors and distinguish two categories of measures: country’s quality of legal institutions and laws protecting shareholder rights. Our results show that firms from countries with better institutional environment are more likely to engage in CSR activities, supporting both the prominent role of institutional environment in explaining CSP variation across firms and the CSR-value enhancing view. Moreover, both country’s quality of legal institutions and laws protecting shareholders rights explain scores on four domains: Environment, Corporate Governance, Human Resources and Human Rights. However, Business Behavior domain is only related to an indicator measuring laws protecting shareholders rights. Community Involvement is related to the quality of legal institutions in the country. Finally, we show that CSP is negatively affected by leverage and positively affected by firm size. However, CSP is not related to firm profitability.

Suggested Citation

  • Karim Ben Khediri & Souad Lajili Jarjir, 2015. "New Insights on Corporate SocialResponsibility and Country-level Institutions in Western Europe," Bankers, Markets & Investors, ESKA Publishing, issue 136-137, pages 20-40, May-June.
    • Handle: RePEc:rbq:journl:i:136-137:p:20-40
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    More about this item

    Keywords

    Corporate Social Responsibility (CSR); Environmental; Social And Governance (Esg) Considerations; Firm Value; Stakeholders; Investor Protection; Institutions;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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