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Speaking of Corporate Social Responsibility

Author

Listed:
  • Liang, H.

    (Tilburg University, TILEC)

  • Marquis, C.
  • Renneboog, L.D.R.

    (Tilburg University, TILEC)

  • Li Sun, Sunny

Abstract

We argue that the language spoken by corporate decision makers influences their firms’ social responsibility and sustainability practices. Linguists suggest that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future. Prior research has shown that speakers of strong FTR languages (such as English, French, and Spanish) exhibit less future-oriented behavior (Chen, 2013). Yet, research has not established how this mechanism may affect the future-oriented activities of corporations. We theorize that companies with strong-FTR languages as their official/working language would have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR) compared to those in weak-FTR language environments. Examining thousands of global companies across 59 countries from 1999-2011, we find support for our theory, and further that the negative association between FTR and CSR performance is weaker for firms that have greater exposure to diverse global languages as a result of (a) being headquartered in countries with higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. Our results suggest that language use by corporations is a key cultural variable that is a strong predictor of CSR and sustainability.

Suggested Citation

  • Liang, H. & Marquis, C. & Renneboog, L.D.R. & Li Sun, Sunny, 2014. "Speaking of Corporate Social Responsibility," Discussion Paper 2014-018, Tilburg University, Tilburg Law and Economic Center.
  • Handle: RePEc:tiu:tiutil:1b8f9b47-56b4-42a0-87de-a2ae19881292
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    1. repec:eee:touman:v:63:y:2017:i:c:p:158-169 is not listed on IDEAS
    2. repec:eee:corfin:v:46:y:2017:i:c:p:320-341 is not listed on IDEAS
    3. Cecilia Boggio & Elsa Fornero & Henriette Prast & Jose Sanders, 2014. "Seven Ways to Knit Your Portfolio: Is Investor Communication Neutral?," CeRP Working Papers 140, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    4. repec:eee:jaecon:v:63:y:2017:i:2:p:288-306 is not listed on IDEAS

    More about this item

    Keywords

    language; future-time-reference; categories; culture; Corporate social responsibility; sustainability;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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