Stakeholder preference and strategic corporate social responsibility

This paper investigates the role of stakeholder preference on corporate social responsibility (CSR) strategies. Using a staggered difference-in-difference approach, we show that Indian firms increase CSR expenses when trade restrictions (Antidumping) are initiated against competing Chinese exports f...

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Bibliographic Details
Published in:Journal of corporate finance (Amsterdam, Netherlands) Netherlands), 2022-12, Vol.77, p.102286, Article 102286
Main Authors: Banerjee, Shantanu, Homroy, Swarnodeep, Slechten, Aurélie
Format: Article
Language:English
Subjects:
Anti-dumping
Corporate social responsibility
Firm investment
India
International trade
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Summary:This paper investigates the role of stakeholder preference on corporate social responsibility (CSR) strategies. Using a staggered difference-in-difference approach, we show that Indian firms increase CSR expenses when trade restrictions (Antidumping) are initiated against competing Chinese exports from countries with a high stakeholder preference for CSR. However, when these shocks emanate from countries with a lower stakeholder preference, CSR expenses remain unchanged. Capital expenditure and R&D of Indian firms increase following AD shocks, irrespective of their country of origin. Finally, CSR increases firm value only when the demand shocks originate from countries with a higher CSR preference. Collectively, we provide evidence for consumer-driven CSR strategies.
ISSN:0929-1199
1872-6313
DOI:10.1016/j.jcorpfin.2022.102286