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Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea

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  • Woo Jae Lee

    (College of Economics and Management, Chungnam National University, Daejeon 34134, Korea)

  • Seung Uk Choi

    (Department of Accounting and Taxation, School of Management, Kyung Hee University, Seoul 02447, Korea)

Abstract

Few studies examine how firms make strategic decisions over time. In this study, we test whether a firm undertakes corporate social responsibility (CSR) activities as a function of its life-cycle stage. Drawing on prior CSR research that finds ethical concerns and opportunistic behavior to be two key motivations that underpin CSR activities, we hypothesize that firms in their growth stage are positively associated with CSR, while firms in stage of decline are less likely to invest in CSR. The empirical findings of our study—derived by leveraging a sample of South Korean listed firms—are consistent with these predictions. We further find that in the growth stage, group-affiliated firms are more engaged in CSR than are unaffiliated firms. Given that affiliated firms can share the resources of other group-member firms, this evidence supports the slack resource hypothesis. Overall, our results indicate that firms have different CSR strategies, depending on their life-cycle stage.

Suggested Citation

  • Woo Jae Lee & Seung Uk Choi, 2018. "Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea," Sustainability, MDPI, Open Access Journal, vol. 10(10), pages 1-17, October.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3794-:d:177032
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    References listed on IDEAS

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    2. Jin Tang & Timo Sipiläinen & Gang Fu, 2020. "How Could Cooperatives Successfully Develop Their Social Responsibility: The Perspective of Life Cycle," Sustainability, MDPI, Open Access Journal, vol. 12(21), pages 1-17, November.
    3. Erhan Boğan & Bekir Bora Dedeoğlu, 2020. "Hotel employees' corporate social responsibility perception and organizational citizenship behavior: Perceived external prestige and pride in organization as serial mediators," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2342-2353, September.
    4. Nam Chul Jung & Hyun Ah Kim, 2019. "The Effect of Listing Period on Corporate Social Responsibility: Evidence from Korea," Sustainability, MDPI, Open Access Journal, vol. 11(8), pages 1-15, April.
    5. Hyun Ah Kim & Nam Chul Jung, 2020. "The Effect of Corporate Social Performance on Audit Hours: Moderating Role of the Emphasis of Matter Paragraphs in Audit Report," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-17, January.
    6. Cheng-Feng Cheng, 2020. "Revisiting Internal Marketing for the Determinants of Job (Dis)Satisfaction by Using Asymmetric Approach," Sustainability, MDPI, Open Access Journal, vol. 12(9), pages 1-15, May.

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