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Negative performance feedback and firms’ CSR strategy selection: Conformity or differentiation?

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  • Zhu, Sailin
  • Zhang, Xin

Abstract

Drawing on the behavioral theory of the firm (BTOF), studies debate about whether underperforming firms will engage in more corporate social responsibility (CSR). In this study, we categorize CSR into CSR conformity and CSR differentiation, and find that underperforming firms are more likely to increase CSR conformity but decrease CSR differentiation. Furthermore, market strategy deviation strengthens the positive effect of negative performance feedback on CSR conformity and the negative effect on CSR differentiation. This study sheds new light on the debate over the relationship between negative performance feedback and CSR.

Suggested Citation

  • Zhu, Sailin & Zhang, Xin, 2024. "Negative performance feedback and firms’ CSR strategy selection: Conformity or differentiation?," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011280
    DOI: 10.1016/j.frl.2024.106099
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    References listed on IDEAS

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    More about this item

    Keywords

    CSR conformity; CSR differentiation; Negative performance feedback;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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