Speaking of Corporate Social Responsibility

H. Liang, C. Marquis, L.D.R. Renneboog, Sunny Li Sun

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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.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages43
Volume2014-023
Publication statusPublished - 2014

Publication series

NameCentER Discussion Paper
Volume2014-023

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Keywords

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

Cite this

Liang, H., Marquis, C., Renneboog, L. D. R., & Li Sun, S. (2014). Speaking of Corporate Social Responsibility. (CentER Discussion Paper; Vol. 2014-023). Tilburg: Finance.