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Is corporate social responsibility a matter of trust? A cross-country investigation

Author

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  • Zhu, Hui
  • Wagner, Eva

Abstract

This study examines how social trust influences corporate social responsibility (CSR) across countries. We find a positive relationship between CSR engagement and societal trust. We also document the economic mechanisms explaining how trust affects CSR activities. Our findings are robust to alternative CSR measures, sub-sample analyses, and country-level estimations. Furthermore, the results from difference-in-difference methods and an instrumental variables (IVs) approach imply that our findings are robust in accounting for endogeneity. Overall, our findings suggest that a higher level of trust reduces the likelihood of harmful misunderstandings while facilitating greater stakeholder cooperation, thereby increasing CSR activities.

Suggested Citation

  • Zhu, Hui & Wagner, Eva, 2024. "Is corporate social responsibility a matter of trust? A cross-country investigation," International Review of Financial Analysis, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:finana:v:93:y:2024:i:c:s1057521924000590
    DOI: 10.1016/j.irfa.2024.103127
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    More about this item

    Keywords

    Corporate social responsibility; Trust; Stakeholder cooperation view;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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