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

Author

Listed:
  • Souad Lajili Jarjir

    (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Karim Ben Khediri

Abstract

We investigate the relationship between Corporate Social Performance (CSP) and country-level 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

  • Souad Lajili Jarjir & Karim Ben Khediri, 2015. "New Insights on Corporate Social Responsibility and Country-level Institutions in Western Europe," Post-Print hal-01133562, HAL.
    • Handle: RePEc:hal:journl:hal-01133562
    as

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