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A Theoretical Analysis of the Relationship between Social Capital and Corporate Social Responsibility: Concepts and Definitions

Author

Listed:
  • Giacomo Degli Antoni

    () (University of Milano-Bicocca)

  • Lorenzo Sacconi

    () (University of Trento - Department of Economics)

Abstract

Trust, trustworthiness and ethical norms of reciprocity and cooperation have been receiving more and more attention in economic analysis. In particular, two concepts have been widely used in order to study the socio-economic effects of these factors: the concept of social capital (hereafter also SC) and of corporate social responsibility (hereafter also CSR). Even though SC and CSR seem to be linked by many common elements related to the quality and quantity of social relations between agents, their relationship has not been deeply investigated yet. This paper is aimed at shedding light on some aspects of this relationship, in particular, 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 (e.g. Paldam 2000), we consider two dimensions of this notion. Starting from the distinction introduced by Uphoff (1999), we take into account a cognitive and a structural idea of SC. 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, we adopt a contractarian approach and consider CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Among stakeholders, we distinguish between strong and weak stakeholders. 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. They are, for example, skilled workers or institutional investors. 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. They are, for example, unskilled workers. Considering the notions of cognitive and structural SC and a contractarian approach to CSR, we show 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.

Suggested Citation

  • Giacomo Degli Antoni & Lorenzo Sacconi, 2008. "A Theoretical Analysis of the Relationship between Social Capital and Corporate Social Responsibility: Concepts and Definitions," Econometica Working Papers wp01, Econometica.
  • Handle: RePEc:ent:wpaper:wp01
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    References listed on IDEAS

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    1. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    2. 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, September.
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    Citations

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    Cited by:

    1. Jayashankar, Priyanka & Ashta, Arvind & Rasmussen, Mark, 2015. "Slow money in an age of fiduciary capitalism," Ecological Economics, Elsevier, vol. 116(C), pages 322-329.
    2. Fabio Sabatini & Francesco Sarracino, 2014. "E-participation: Social Capital and the Internet," Working Papers 2014.81, Fondazione Eni Enrico Mattei.
    3. Fabio Sabatini & Francesco Sarracino, 2013. "Will Facebook save or destroy social capital? An empirical investigation into the effect of online interactions on trust and networks," Department of Economics University of Siena 692, Department of Economics, University of Siena.
    4. 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," MPRA Paper 44860, University Library of Munich, Germany.
    5. Fabio Sabatini & Francesca Modena & Ermanno Tortia, 2014. "Do cooperative enterprises create social trust?," Small Business Economics, Springer, vol. 42(3), pages 621-641, March.
    6. Lorenzo Sacconi, 2011. "Multi-stakeholder governance for effectively sharing social responsibility 1 (social contracts, deliberative democracy and endogenous conformity)," Econometica Working Papers wp26, Econometica.
    7. Fabio Sabatini & Francesca Modena & Ermanno Tortia, 2012. "�Do cooperative enterprises create social trust?," Euricse Working Papers 1243, Euricse (European Research Institute on Cooperative and Social Enterprises).
    8. 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.
    9. Sabatini, Fabio & Sarracino, Francesco, 2015. "Online social networks and trust," MPRA Paper 62506, University Library of Munich, Germany.
    10. Riillo, Cesare Fabio Antonio & Sarracino, Francesco, 2014. "Motivations for Corporate Social Responsibility: all talk and no walk?," MPRA Paper 60211, University Library of Munich, Germany.
    11. Mei Peng Low, 2016. "Corporate Social Responsibility and the Evolution of Internal Corporate Social Responsibility in 21st CenturyOrganization Performance: A Case Study of Pakistan Telecommunication Authority," Asian Journal of Social Sciences and Management Studies, Asian Online Journal Publishing Group, vol. 3(1), pages 56-74.

    More about this item

    Keywords

    social capital; social norms; reputation; CSR; reciprocity; network; trust;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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