Competition, Time Horizon and Corporate Social Performance

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Abstract

Abstract: This paper develops and tests a conceptual framework on the relationships between competition, time horizon and corporate social performance (CSP). We hypothesize that more intense competition discourages CSP by lowering the time horizon of companies. We test the hypothesis on a sample of 4696 of mainly small and medium-sized companies from twelve European countries. We distinguish between price competition, market position and technological competition. We find that companies with a longer time horizon have a higher CSP and that price competition and a ‘level playing field’ market position shorten the time horizon. The intensity of technological competition has a positive effect on time horizon, but also exerts a direct positive influence on CSP. Test results show that time horizon significantly mediates the influence of price competition, the market position and technological competition on CSP. The analysis implies that, from the perspective of CSP, the economic policy of the government should not focus on fostering price competition, but rather on strengthening competition in innovation.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Number of pages27
Volume2013-060
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-060

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Keywords

  • Corporate social performance
  • time horizon
  • price competition
  • SMEs
  • technological competition

Cite this

Graafland, J. J., & Smid, H. (2013). Competition, Time Horizon and Corporate Social Performance. (CentER Discussion Paper; Vol. 2013-060). Tilburg: Economics.