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Speaking of Corporate Social Responsibility

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  • Liang, H.

    (Tilburg University, School of Economics and Management)

  • Marquis, C.
  • Renneboog, L.D.R.

    (Tilburg University, School of Economics and Management)

  • Li Sun, Sunny

Abstract

We argue that the language spoken by corporate decision makers influences their firms’ social responsibility and sustainability practices. Linguists suggest that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future. Prior research has shown that speakers of strong FTR languages (such as English, French, and Spanish) exhibit less future-oriented behavior (Chen, 2013). Yet, research has not established how this mechanism may affect the future-oriented activities of corporations. We theorize that companies with strong-FTR languages as their official/working language would have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR) compared to those in weak-FTR language environments. Examining thousands of global companies across 59 countries from 1999-2011, we find support for our theory, and further that the negative association between FTR and CSR performance is weaker for firms that have greater exposure to diverse global languages as a result of (a) being headquartered in countries with higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. Our results suggest that language use by corporations is a key cultural variable that is a strong predictor of CSR and sustainability.
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Suggested Citation

  • Liang, H. & Marquis, C. & Renneboog, L.D.R. & Li Sun, Sunny, 2014. "Speaking of Corporate Social Responsibility," Other publications TiSEM 92732b13-3daf-45d1-99a1-1, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:92732b13-3daf-45d1-99a1-16909c296894
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    14. Gordon, Elizabeth A. & Gotti, Giorgio & Ho, Joanna H. & Mora, Araceli & Morris, Richard D., 2019. "Commentary: Where is International Accounting Research Going? Issues Needing Further Investigation," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 37(C).
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    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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