Finance and Society: On the Foundations of Corporate Social Responsibility (Revised version of CentER DP 2013-071)

Research output: Working paperDiscussion paperOther research output

481 Downloads (Pure)

Abstract

We investigate the fundamental determinants and value implications of corporate social responsibility (CSR) around the world. We contrast three broad views on CSR: (1) it is a response to government failure; (2) it reflects individual and societal preferences; (3) it is an equilibrium result of a country's legal origin that shapes the corporations' tradeoff between shareholder and stakeholder values. Using public and proprietary country-level sustainability and firm-level CSR data, we find that: (a) Legal origins are more fundamental sources of CSR than political, social, and firm-level financial forces; (b) The English common low, widely-recognized as being most shareholder-oriented and economically efficient, fosters CSR and sustainability the least, while companies under the civil law origin assume most social responsibilities; (c) Globally, CSR contributes to shareholder value maximization.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages55
Volume2014-069
Publication statusPublished - 1 Dec 2014

Publication series

NameCentER Discussion Paper
Volume2014-069

    Fingerprint

Keywords

  • Corporate social responsibility
  • sustainability
  • legal origins
  • stakeholder orientation

Cite this

Liang, H., & Renneboog, L. D. R. (2014). Finance and Society: On the Foundations of Corporate Social Responsibility (Revised version of CentER DP 2013-071). (CentER Discussion Paper; Vol. 2014-069). Tilburg: CentER, Center for Economic Research.