IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v184y2023i1d10.1007_s10551-022-05172-4.html
   My bibliography  Save this article

Elections and CSR Engagement: International Evidence

Author

Listed:
  • Bryan W. Husted

    (Tecnologico de Monterrey)

  • Walid Saffar

    (Hong Kong Polytechnic University)

Abstract

Using a large panel of elections in 44 countries, we show that national elections affect CSR in contrasting ways. We posit and find that in strong institutional environments CSR engagement responds negatively to uncertainty and decreases during election periods relative to non-election periods. However, in the context of institutional weakness, characterized by incomplete and captured national institutions, we find that CSR engagement increases in electoral periods, consistent with rent-seeking behavior. We discuss the implications of these results for both theory and practice.

Suggested Citation

  • Bryan W. Husted & Walid Saffar, 2023. "Elections and CSR Engagement: International Evidence," Journal of Business Ethics, Springer, vol. 184(1), pages 115-138, April.
    • Handle: RePEc:kap:jbuset:v:184:y:2023:i:1:d:10.1007_s10551-022-05172-4
    DOI: 10.1007/s10551-022-05172-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-022-05172-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-022-05172-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wilson Akpan, 2006. "Between responsibility and rhetoric: some consequences of CSR practice in Nigeria's oil province," Development Southern Africa, Taylor & Francis Journals, vol. 23(2), pages 223-240.
    2. Rodrik, Dani, 1991. "Policy uncertainty and private investment in developing countries," Journal of Development Economics, Elsevier, vol. 36(2), pages 229-242, October.
    3. Hao Liang & Luc Renneboog, 2017. "On the Foundations of Corporate Social Responsibility," Journal of Finance, American Finance Association, vol. 72(2), pages 853-910, April.
    4. Lambsdorff, Johann Graf, 2002. "Corruption and Rent-Seeking," Public Choice, Springer, vol. 113(1-2), pages 97-125, October.
    5. Hoje Jo & Maretno Harjoto, 2011. "Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 103(3), pages 351-383, October.
    6. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    7. Jamali, Dima & Karam, Charlotte & Yin, Juelin & Soundararajan, Vivek, 2017. "CSR logics in developing countries: Translation, adaptation and stalled development," Journal of World Business, Elsevier, vol. 52(3), pages 343-359.
    8. Sapienza, Paola, 2004. "The effects of government ownership on bank lending," Journal of Financial Economics, Elsevier, vol. 72(2), pages 357-384, May.
    9. Shawn Cole, 2009. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 219-250, January.
    10. Henisz, Witold J. & Williamson, Oliver E., 1999. "Comparative Economic Organization—Within and Between Countries," Business and Politics, Cambridge University Press, vol. 1(3), pages 261-277, November.
    11. Erik Snowberg & Justin Wolfers & Eric Zitzewitz, 2007. "Partisan Impacts on the Economy: Evidence from Prediction Markets and Close Elections," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 807-829.
    12. Jonathan P. Doh & Thomas Lawton & Tazeeb Rajwani, 2012. "Advancing Nonmarket Strategy Research : Institutional Perspectives in a Changing World," Post-Print hal-02312974, HAL.
    13. Lubos Pástor & Pietro Veronesi, 2012. "Uncertainty about Government Policy and Stock Prices," Journal of Finance, American Finance Association, vol. 67(4), pages 1219-1264, August.
    14. Stephen J Kobrin, 1979. "Political Risk: A Review and Reconsideration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 10(1), pages 67-80, March.
    15. Roland Bénabou & Jean Tirole, 2010. "Individual and Corporate Social Responsibility," Economica, London School of Economics and Political Science, vol. 77(305), pages 1-19, January.
    16. Redl, Chris, 2020. "Uncertainty matters: Evidence from close elections," Journal of International Economics, Elsevier, vol. 124(C).
    17. Valentina Marano & Peter Tashman & Tatiana Kostova, 2017. "Escaping the iron cage: Liabilities of origin and CSR reporting of emerging market multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 386-408, April.
    18. Konstantinos Angelopoulos & George Economides, 2008. "Fiscal policy, rent seeking, and growth under electoral uncertainty: theory and evidence from the OECD," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1375-1405, November.
    19. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    20. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    21. Marianne Bertrand & Francis Kramarz & Antoinette Schoar & David Thesmar, 2018. "The Cost of Political Connections," Review of Finance, European Finance Association, vol. 22(3), pages 849-876.
    22. Kurer, Oskar, 1993. "Clientelism, Corruption, and the Allocation of Resources," Public Choice, Springer, vol. 77(2), pages 259-273, October.
    23. repec:bla:jfinan:v:59:y:2004:i:2:p:537-600 is not listed on IDEAS
    24. Mohammad, Shoeb & Husted, Bryan W., 2021. "Innovation, new ventures, and corruption: Evidence from India," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    25. John A. List & Daniel M. Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1249-1281.
    26. Campbell, John Y, 1996. "Understanding Risk and Return," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 298-345, April.
    27. Krüger, Philipp, 2015. "Corporate goodness and shareholder wealth," Journal of Financial Economics, Elsevier, vol. 115(2), pages 304-329.
    28. Robert Tollison, 2012. "The economic theory of rent seeking," Public Choice, Springer, vol. 152(1), pages 73-82, July.
    29. Woo‐Jong Lee & Jeffrey Pittman & Walid Saffar, 2020. "Political Uncertainty and Cost Stickiness: Evidence from National Elections around the World," Contemporary Accounting Research, John Wiley & Sons, vol. 37(2), pages 1107-1139, June.
    30. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    31. Julio, Brandon & Yook, Youngsuk, 2016. "Policy uncertainty, irreversibility, and cross-border flows of capital," Journal of International Economics, Elsevier, vol. 103(C), pages 13-26.
    32. Alan Muller & Ans Kolk, 2010. "Extrinsic and Intrinsic Drivers of Corporate Social Performance: Evidence from Foreign and Domestic Firms in Mexico," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 1-26, January.
    33. Gary J Fooks & Anna B Gilmore & Katherine E Smith & Jeff Collin & Chris Holden & Kelley Lee, 2011. "Corporate Social Responsibility and Access to Policy Élites: An Analysis of Tobacco Industry Documents," PLOS Medicine, Public Library of Science, vol. 8(8), pages 1-12, August.
    34. Susan L Young & Mona V Makhija, 2014. "Firms’ corporate social responsibility behavior: An integration of institutional and profit maximization approaches," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(6), pages 670-698, August.
    35. Cruz, Jose M. & Wakolbinger, Tina, 2008. "Multiperiod effects of corporate social responsibility on supply chain networks, transaction costs, emissions, and risk," International Journal of Production Economics, Elsevier, vol. 116(1), pages 61-74, November.
    36. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    37. Wiig, Arne & Kolstad, Ivar, 2010. "Multinational corporations and host country institutions: A case study of CSR activities in Angola," International Business Review, Elsevier, vol. 19(2), pages 178-190, April.
    38. Ming Jia & Zhe Zhang, 2018. "The Role of Corporate Donations in Chinese Political Markets," Journal of Business Ethics, Springer, vol. 153(2), pages 519-545, December.
    39. Brandon Julio & Youngsuk Yook, 2012. "Political Uncertainty and Corporate Investment Cycles," Journal of Finance, American Finance Association, vol. 67(1), pages 45-84, February.
    40. Dinc, I. Serdar, 2005. "Politicians and banks: Political influences on government-owned banks in emerging markets," Journal of Financial Economics, Elsevier, vol. 77(2), pages 453-479, August.
    41. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    42. Magali Delmas & Michael W. Toffel, 2004. "Stakeholders and environmental management practices: an institutional framework," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 209-222, July.
    43. Macrae, John, 1982. "Underdevelopment and the economics of corruption: A game theory approach," World Development, Elsevier, vol. 10(8), pages 677-687, August.
    44. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Sinziana Dorobantu & Aseem Kaul & Bennet Zelner, 2017. "Nonmarket strategy research through the lens of new institutional economics: An integrative review and future directions," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 114-140, January.
    45. James E Clarke & Peter W Liesch, 2017. "Wait-and-see strategy: Risk management in the internationalization process model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(8), pages 923-940, October.
    46. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
    47. Gautam Ahuja & Sai Yayavaram, 2011. "PERSPECTIVE ---Explaining Influence Rents: The Case for an Institutions-Based View of Strategy," Organization Science, INFORMS, vol. 22(6), pages 1631-1652, December.
    48. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, March.
    49. North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2013. "Violence and Social Orders," Cambridge Books, Cambridge University Press, number 9781107646995, January.
    50. Gary J Fooks & Anna B Gilmore, 2013. "Corporate Philanthropy, Political Influence, and Health Policy," PLOS ONE, Public Library of Science, vol. 8(11), pages 1-11, November.
    51. Tahiru Azaaviele Liedong & Daniel Aghanya & Tazeeb Rajwani, 2020. "Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions," Journal of Business Ethics, Springer, vol. 161(4), pages 855-876, February.
    52. Mara Faccio, 2006. "Politically Connected Firms," American Economic Review, American Economic Association, vol. 96(1), pages 369-386, March.
    53. Jonathan P. Doh & Thomas Lawton & Tazeeb Rajwani, 2012. "Advancing Nonmarket Strategy Research : Institutional Perspectives in a Changing World," Post-Print hal-02276718, HAL.
    54. Birger Wernerfelt & Aneel Karnani, 1987. "Competitive strategy under uncertainty," Strategic Management Journal, Wiley Blackwell, vol. 8(2), pages 187-194, March.
    55. Maria Boutchkova & Hitesh Doshi & Art Durnev & Alexander Molchanov, 2012. "Precarious Politics and Return Volatility," The Review of Financial Studies, Society for Financial Studies, vol. 25(4), pages 1111-1154.
    56. Huseyin Gulen & Mihai Ion, 2016. "Editor's Choice Policy Uncertainty and Corporate Investment," The Review of Financial Studies, Society for Financial Studies, vol. 29(3), pages 523-564.
    57. Christian Engau & Volker Hoffmann, 2011. "Corporate response strategies to regulatory uncertainty: evidence from uncertainty about post-Kyoto regulation," Policy Sciences, Springer;Society of Policy Sciences, vol. 44(1), pages 53-80, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuan Qiu & Di Zhou, 2024. "De‐politicization and corporate social responsibility: Empirical evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3668-3684, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naoki Yasuda & Hitoshi Mitsuhashi, 2017. "Learning from Political Change and the Development of MNCs’ Political Capabilities: Evidence from the Global Mining Industry," Management International Review, Springer, vol. 57(5), pages 749-774, October.
    2. Andrei Panibratov & Ramsés A. Sánchez Herrera & Alvar Castello Esquerdo & Daria Klishevich, 2023. "Surviving populism: A corporate political activity approach in Mexico," Journal of International Business Policy, Palgrave Macmillan, vol. 6(2), pages 182-200, June.
    3. Yuan, Tiezhen & Wu, Ji (George) & Qin, Ni & Xu, Jian, 2022. "Being nice to stakeholders: The effect of economic policy uncertainty on corporate social responsibility," Economic Modelling, Elsevier, vol. 108(C).
    4. Peng, Daoju & Colak, Gonul & Shen, Jianfu, 2023. "Lean against the wind: The effect of policy uncertainty on a firm's corporate social responsibility strategy," Journal of Corporate Finance, Elsevier, vol. 79(C).
    5. Woo‐Jong Lee & Jeffrey Pittman & Walid Saffar, 2020. "Political Uncertainty and Cost Stickiness: Evidence from National Elections around the World," Contemporary Accounting Research, John Wiley & Sons, vol. 37(2), pages 1107-1139, June.
    6. Chahine, Salim & Daher, Mai & Saade, Samer, 2021. "Doing good in periods of high uncertainty: Economic policy uncertainty, corporate social responsibility, and analyst forecast error," Journal of Financial Stability, Elsevier, vol. 56(C).
    7. Janbaz, Mehdi & Hassan, M. Kabir & Floreani, Josanco & Dreassi, Alberto & Jiménez, Alfredo, 2022. "Political risk in banks: A review and agenda," Research in International Business and Finance, Elsevier, vol. 62(C).
    8. Jens, Candace E., 2017. "Political uncertainty and investment: Causal evidence from U.S. gubernatorial elections," Journal of Financial Economics, Elsevier, vol. 124(3), pages 563-579.
    9. Karsten Müller, 2023. "Electoral Cycles in Macroprudential Regulation," American Economic Journal: Economic Policy, American Economic Association, vol. 15(4), pages 295-322, November.
    10. Mario Daniele Amore & Margherita Corina, 2021. "Political elections and corporate investment: International evidence," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1775-1796, December.
    11. Shirodkar, Vikrant & Liedong, Tahiru Azaaviele & Rajwani, Tazeeb & Lawton, Thomas C., 2024. "MNE nonmarket strategy in a changing world: Complexities, varieties, and a values-based approach," International Business Review, Elsevier, vol. 33(2).
    12. Laura A. Wellman, 2017. "Mitigating political uncertainty," Review of Accounting Studies, Springer, vol. 22(1), pages 217-250, March.
    13. Simon Hartmann & Thomas Lindner & Jakob Müllner & Jonas Puck, 2022. "Beyond the nation-state: Anchoring supranational institutions in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1282-1306, August.
    14. Liu, Xianda & Hou, Wenxuan & Main, Brian G.M., 2022. "Anti-market sentiment and corporate social responsibility: Evidence from anti-Jewish pogroms," Journal of Corporate Finance, Elsevier, vol. 76(C).
    15. Marcelin, Isaac & Stephen, Sheryl-Ann K. & Fanta, Fassil & Tecklezion, Mussie, 2019. "Political regimes, investment and electoral uncertainty," Research in International Business and Finance, Elsevier, vol. 47(C), pages 580-599.
    16. Anne-Laure Delatte & Adrien Matray & Noémie Pinardon-Touati, 2020. "Private Credit Under Political Influence: Evidence from France," Working Papers 2020-56, Princeton University. Economics Department..
    17. Pisani, Niccolò & Kourula, Arno & Kolk, Ans & Meijer, Renske, 2017. "How global is international CSR research? Insights and recommendations from a systematic review," Journal of World Business, Elsevier, vol. 52(5), pages 591-614.
    18. Xue, Xingnan & Hu, Nan, 2023. "Economic policy uncertainty and imitation behaviors of corporate social responsibility practices: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 89(C).
    19. Hasan, Mostafa Monzur & Jiang, Haiyan, 2023. "Political sentiment and corporate social responsibility," The British Accounting Review, Elsevier, vol. 55(1).
    20. Li, Qingyuan & Li, Si & Xu, Li, 2018. "National elections and tail risk: International evidence," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 113-128.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:184:y:2023:i:1:d:10.1007_s10551-022-05172-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.