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A theoretical analysis of the relationship between social capital and corporate social responsibility: concepts and definitions

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  • Lorenzo Sacconi

    ()

  • Giacomo Degli Antoni

    ()

Abstract

The paper studies the relationship between social capital (SC) and Corporate Social Responsibility (CSR) by investigating the idea of a virtuous circle, between the level of SC and the implementation of CSR practices, that fosters socio-economic development by generating social inclusion and social networks based on trust and trustworthiness. Following the literature on SC that stresses its multidimensional character, both a cognitive and a structural idea of SC are considered. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents. With regard to the concept of CSR, a contractarian approach is adopted and CSR is considered as an extended model of corporate governance, based on the fiduciary duties owed to all the firm’s stakeholders. Among stakeholders, a original distinction between “strong” and “weak” stakeholders is introduced. The key element that allows to distinguish between strong and weak stakeholders concerns the consequences that the break in the relationship with the firm produces both on the stakeholder and on the firm. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. Considering the notions of cognitive and structural SC, a contractarian approach to CSR and the distinction between weak and strong stakeholders, the paper shows that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.

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Bibliographic Info

Paper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0813.

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Date of creation: 2008
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Handle: RePEc:trn:utwpde:0813

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Related research

Keywords: Social capital; Corporate Social Responsibility; Social network; Ideal utility; Cooperation; Trust.;

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References

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  1. Gianluca Grimalda & Lorenzo Sacconi, 2005. "The Constitution of the Not-For-Profit Organisation: Reciprocal Conformity to Morality," Constitutional Political Economy, Springer, vol. 16(3), pages 249-276, 09.
  2. Lorenzo Sacconi, 2001. "Incomplete contracts and corporate ethics: a game theoretical model under fuzzy information," LIUC Papers in Ethics, Law and Economics 91, Cattaneo University (LIUC).
  3. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  4. Lorenzo Sacconi, 2006. "A Social Contract Account for CSR as an Extended Model of Corporate Governance (I): Rational Bargaining and Justification," Journal of Business Ethics, Springer, vol. 68(3), pages 259-281, October.
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Cited by:
  1. Fabio Sabatini & Francesca Modena & Ermanno Tortia, 2014. "Do cooperative enterprises create social trust?," Small Business Economics, Springer, vol. 42(3), pages 621-641, March.
  2. Lorenzo Sacconi, 2010. "A Rawlsian View of CSR and the Game Theory of its Implementation (III): Conformism, Equilibrium Refinement and Selection," Econometica Working Papers wp24, Econometica.
  3. Giacomo Degli Antoni & Fabio Sabatini, 2013. "Disentangling the relationship between nonprofit and social capital: the role of social cooperatives and social welfare associations in the development of networks of strong and weak ties," Econometica Working Papers wp48, Econometica.
  4. Lorenzo Sacconi, 2011. "Multi-stakeholder governance for effectively sharing social responsibility 1 (social contracts, deliberative democracy and endogenous conformity)," Econometica Working Papers wp26, Econometica.
  5. Sabatini, Fabio & Sarracino, Francesco, 2014. "E-participation: social capital and the Internet," MPRA Paper 55722, University Library of Munich, Germany.
  6. Sabatini, Fabio & Sarracino, Francesco, 2014. "Will Facebook save or destroy social capital? An empirical investigation into the effect of online interactions on trust and networks," MPRA Paper 53325, University Library of Munich, Germany.

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