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The impact of business on society: exploring CRS adoption and alleged human rights abuses by large corporations

  • Davide Fiaschi
  • Elisa Giuliani

Management research on Corporate Social Responsibility (CSR) focuses almost exclusively on the impact of CSR on profitability or corporate value. A largely neglected question is whether CSR impacts positively on society. We address this gap in the literature by exploring the relationship between CSR adoption (as reflected by corporate declarations to adopt CSR policies) and corporate involvement in alleged human rights abuses. Using information on 140 large advanced country corporations, we find that there is a relationship between CSR and alleged human rights abuses, but that the nature of this relationship varies according to the type of abuse: firms that declare to be CSR-adopters appear less likely to be involved than non-adopters in the worst of the abuses (i.e. jus cogens abuses), but more likely than non-adopters to be involved in other types of "less serious" abuse (i.e. no-jus cogens abuses). Also, over time, the adoption of CSR reduces corporate involvement in direct abuses allegedly committed by management, or by a subsidiary, but not indirect abuses allegedly committed by complicit third parties (e.g. suppliers, clients, etc.). Our analyses contribute to the theory on the impact of business on society and have some normative implications for corporate abuses of human rights.

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Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2011/13.

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Date of creation: 21 Jun 2011
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Handle: RePEc:ssa:lemwps:2011/13
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  1. Julia Roloff & Michael Aßländer, 2010. "Corporate Autonomy and Buyer–Supplier Relationships: The Case of Unsafe Mattel Toys," Journal of Business Ethics, Springer, vol. 97(4), pages 517-534, December.
  2. Xiaomin Yu, 2008. "Impacts of Corporate Code of Conduct on Labor Standards: A Case Study of Reebok’s Athletic Footwear Supplier Factory in China," Journal of Business Ethics, Springer, vol. 81(3), pages 513-529, September.
  3. Sprinkle, Geoffrey B. & Maines, Laureen A., 2010. "The benefits and costs of corporate social responsibility," Business Horizons, Elsevier, vol. 53(5), pages 445-453, September.
  4. Aaronson, Susan Ariel, 2007. "Seeping in slowly: how human rights concerns are penetrating the WTO," World Trade Review, Cambridge University Press, vol. 6(03), pages 413-449, November.
  5. Suk-Jun Lim & Joe Phillips, 2008. "Embedding CSR Values: The Global Footwear Industry’s Evolving Governance Structure," Journal of Business Ethics, Springer, vol. 81(1), pages 143-156, August.
  6. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
  7. Lisa Calvano, 2008. "Multinational Corporations and Local Communities: A Critical Analysis of Conflict," Journal of Business Ethics, Springer, vol. 82(4), pages 793-805, November.
  8. Vanessa M Strike & Jijun Gao & Pratima Bansal, 2006. "Being good while being bad: social responsibility and the international diversification of US firms," Journal of International Business Studies, Palgrave Macmillan, vol. 37(6), pages 850-862, November.
  9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, June.
  10. Yves Croissant & Giovanni Millo, . "Panel Data Econometrics in R: The plm Package," Journal of Statistical Software, American Statistical Association, vol. 27(i02).
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