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Power and responsibility: How different sources of CEO power affect firms' corporate social responsibility practices

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  • Xingping Jia
  • Shudi Liao
  • Beatrice Van der Heijden
  • Wenqian Li

Abstract

Does greater CEO power come with more responsibility? Previous scholarly work in this field entails divergent results on this question. Based on the upper echelons theory and CEO power literature, this study aimed to explore the mechanisms underlying how different sources of CEO power, including structural, ownership, expert, and prestige power, affect firms’ corporate social responsibility (CSR) practices and whether such relationships are moderated by firm visibility. Using a panel dataset comprising 6604 yearly observations of Chinese publicly traded firms from 2009 to 2019, we found that structural power is negatively related to CSR practices and that expert power is positively related to CSR practices, whereas ownership power and prestige power have no direct relationship with CSR practices. Our results show that firm visibility weakens the negative relationship between structural power and CSR practices and strengthens the relationship between expert power and CSR practices, respectively. Overall, this study reconciles the mixed results of previous studies on the impact of CEO power on CSR and integrates the effect of firm visibility as a contextual factor. This article concludes with practical recommendations on how to manage CSR engagement.

Suggested Citation

  • Xingping Jia & Shudi Liao & Beatrice Van der Heijden & Wenqian Li, 2022. "Power and responsibility: How different sources of CEO power affect firms' corporate social responsibility practices," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 31(3), pages 682-701, July.
    • Handle: RePEc:wly:buseth:v:31:y:2022:i:3:p:682-701
    DOI: 10.1111/beer.12438
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