Business & Society
OnlineFirst articles for the period 11 March 2015 to 24 March 2015
Article
This article addresses the question whether companies benefit from their commitment to corporate social responsibility (CSR). The authors argue that firms which score high on CSR activities build investor confidence and find evidence that they benefit from lower information asymmetry. The authors measure information asymmetry by insider trading, which is defined as the trading of a company's shares by corporate insiders who have an information advantage with the aim to reap gains or avoid losses. Using a sample of U.S. firms listed in the MSCI World Index during the period 2004 to 2013 and the firm- and industry-level CSR rating from Global Engagement Service (GES), the authors show that insider transactions in firms with a high score on CSR activities lead to lower abnormal returns. This investigation extends current literature on the business case for CSR by explaining the influence of CSR activities on asymmetric information. | This conceptual article theorizes about the effect of emotions of individual organizational leaders during a period of sustainability-related upheaval within an industry. To illustrate the effect of emotions, it proposes to draw on the model of five stages of grief by Elisabeth Kübler-Ross, a conceptual framework describing terminally ill patients' responses to their impending death. The authors adapt Kübler-Ross's taxonomy and use anecdotal evidence from grieving top managers of energy companies in response to the nuclear phase-out in Germany. The article conceptualizes the influence of emotions in the decision-making process of key agents in response to institutional pressures in their field. The article suggests that focusing on emotional influences will add an important dimension to the analysis of sustainability strategies, and discuss implications for further research at an individual and organizational level | This article proposes a framework for the analysis of experienced discrimination in home mortgages. It addresses the problem of home mortgage lending discrimination in one of the richest areas of northern Italy. Employees of a local hospital were interviewed to study their perception (or experience) of discriminatory behavior related to home financing. The analysis follows two steps. The first evaluates self-selection (the probability that individuals apply) and the second focuses on the likelihood that applications are accepted by the bank. Findings show that discrimination is likely to appear when the applicant's nationality is considered. In addition to its findings, the study (a) provides an original econometric model on a two-step procedure to test perceived discrimination and (b) suggests a method and approach that may constitute a point of reference for those willing to study perceived discrimination. | The literature on the natural-resource-based view of firms has mostly focused on the positive relationship between financial performance and environmental innovation. The present study extends this research by addressing recent calls to identify the specific managerial approaches that affect a firm's ability to financially benefit from an innovative environmental strategy. In particular, the focus is on how the selected international scope of patented environmental innovations affects a firms' financial performance. The sample used included a 5-year data panel of 3,087 environmental patent applications by the 79 Information and Communication Technology firms in the Financial Times Global 500 firms list. The findings indicate that the geographical scope of the exploitation of environmental patents increases the positive relationship between patented environmental innovation and financial performance whereas the geographical scope of knowledge sourcing of environmental patents does reduce this performance. | Despite increasing pressure to deal with climate change, firms have been slow to respond with effective action. This article presents a multi-level framework for a better understanding of why many firms are failing to reduce their absolute greenhouse gas emissions, which contribute to climate change. The concepts of short-termism and uncertainty avoidance from research in psychology, sociology, and organization theory can explain the phenomenon of organizational inaction on climate change. Antecedents related to short-termism and uncertainty avoidance reinforce one another at three levels-individual, organizational, and institutional-and result in organizational inaction on climate change. The article also discusses the implications of this multi-level framework for research on corporate sustainability
Research examining firm and industry effects on performance has primarily focused on the financial aspects of firm performance. Corporate social performance (CSP) is a major aspect of firm performance that has been under-examined empirically in the literature to date. Adding to the fundamental debate regarding firm versus industry effects on performance, this study uses data drawn from the Kinder, Lydenberg and Domini Co. (KLD) database to examine the degree to which CSP is related to firm, industry, and temporal factors. The results of these analyses suggest that CSP tends to change in a linear manner over time; however, the slope of this line varies across firms and industries. These findings are supported by several robustness checks accounting for autocorrelation, alternative measures of industry, different samples commonly used when using KLD data to measure CSP, and alternative measures of CSP when using the KLD database. The authors also directly compare firm, industry, and temporal effects between CSP and financial performance |
| | | This article examines the role of intermediaries in financial markets in fostering corporate sustainability. Responsible investment (RI) indices have been primarily identified as intermediaries that provide information regarding corporate social performance (CSP) for investors and other stakeholders. The authors argue that the role of these intermediaries is not confined solely to information provision, but they may also incentivize high levels of CSP through mechanisms such as exclusion threats, signaling, and engagement. The authors rely on unique access to the archives of the FTSE4Good Index to examine the effects of these mechanisms on CSP. The study shows that companies facing exclusion threats and signaling are more likely to comply with the intermediary's criteria, and medium levels of engagement leads to higher levels of CSP. The authors contribute to the study of sustainability in financial markets by explicating the mechanisms that intermediaries and other financial actors could employ to foster greater corporate sustainability. | | Firms' real estate choices significantly affect their sustainability, due to real estate's impact on the natural environment. This paper investigates the ecological responsiveness of firms in specific industries by analyzing the decisions these firms make in occupying office space. We analyze the decisions of more than 11,000 tenants to choose office space in green buildings or in, otherwise comparable, conventional buildings nearby. Controlling for building quality and location, we find that corporations in the oil and banking industries, as well as non-profit organizations, are among the most prominent green tenants. Furthermore, measures of an industry's human capital intensity are positively related to the propensity to lease green office space. These empirical findings confirm the theoretical framework on economic advantage and institutional pressure as important determinants for the ecological responsiveness of firms | | | | Andy Crane, Dirk Matten, Irene Henriques, Bryan Husted
Co-Editors, Business & Society
Schulich School of Business
York University
4700 Keele Street, Toronto, M3J 1P3
baseditors@schulich.yorku.ca |