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Journal of Finance Vol. 72 No. 2 2017

On the Foundations of Corporate Social Responsibility

Hao Liang1,2,3,4,5; Luc Renneboog6,1,2,7,8

1 École Polytechnique · 2 Stockholm School of Economics · 3 Tilburg University · 4 University of Cambridge · 5 London Business School · 6 Conference Board · 7 AZ Sint-Lucas · 8 Singapore Management University

open access

Abstract

Using corporate social responsibility (CSR) ratings for 23,000 companies from 114 countries, we find that a firm's CSR rating and its country's legal origin are strongly correlated. Legal origin is a stronger explanation than “doing good by doing well” factors or firm and country characteristics (ownership concentration, political institutions, and globalization): firms from common law countries have lower CSR than companies from civil law countries, with Scandinavian civil law firms having the highest CSR ratings. Evidence from quasi‐natural experiments such as scandals and natural disasters suggests that civil law firms are more responsive to CSR shocks than common law firms.

DOI
10.1111/jofi.12487
Volume
72
Issue
2
Pages
853-910
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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