Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea
Abstract
:1. Introduction
2. Prior Research and Hypotheses Development
2.1. Prior Research on Corporate Life Cycle
2.2. Prior Research on Corporate Social Responsibility Activities
2.3. Hypotheses Development
3. Research Design
3.1. Variables
3.1.1. Proxy of Corporate Life Cycle
3.1.2. Proxy of Corporate Social Responsibility Activities
- (1)
- Calculate the actual value of a given indicator;
- (2)
- Convert actual values to a 100-point scale, based on the rating formula (interpolation method);
- (3)
- Calculate a final score weighted by indicator.
3.2. Research Model
3.3. The Sample
- (1)
- Firms do not operate in a financial industry;
- (2)
- Listed firms have made available the financial data needed to calculate the variables used;
- (3)
- Firms’ group affiliations are identified.
4. Empirical Findings
4.1. Variable Description
4.2. Test Results of Hypotheses
4.3. Additional Tests
4.3.1. The Effect of Business Group on the Relation between Life Cycle and CSR
4.3.2. Further Analysis of Using Sub-CSR Scores
4.3.3. Other Sensitivity Tests
5. Conclusions
Author Contributions
Funding
Conflicts of Interest
References
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Panel A: Sample selection | |||||
Initial sample | 800 | ||||
Less: | |||||
(Financial industry or delisted) | (9) | ||||
(Missing financial data to calculate life cycle and control variables) | (126) | ||||
Final sample | 665 | ||||
Panel B. Sample distribution by year | |||||
Year | 2013 | 2014 | 2015 | 2016 | Total |
Observations | 156 | 161 | 175 | 173 | 665 |
Variable | Mean | Std. | 1% | 25% | Median | 75% | 99% |
---|---|---|---|---|---|---|---|
CSR | 63.64 | 2.13 | 59.29 | 62.30 | 63.44 | 64.95 | 69.42 |
Growth | 0.14 | 0.35 | 0.00 | 0.00 | 0.00 | 0.00 | 1.00 |
Maturity | 0.31 | 0.46 | 0.00 | 0.00 | 0.00 | 1.00 | 1.00 |
Decline | 0.18 | 0.39 | 0.00 | 0.00 | 0.00 | 0.00 | 1.00 |
LifeCycle | 3.07 | 1.29 | 1.00 | 2.00 | 3.00 | 4.00 | 5.00 |
Size | 19.79 | 1.30 | 17.56 | 18.96 | 19.57 | 20.32 | 24.07 |
Leverage | 0.36 | 0.18 | 0.05 | 0.22 | 0.33 | 0.50 | 0.82 |
ROA | 0.05 | 0.04 | −0.04 | 0.02 | 0.04 | 0.07 | 0.22 |
Accruals | −0.02 | 0.05 | −0.16 | −0.05 | −0.02 | 0.01 | 0.18 |
Big | 0.66 | 0.47 | 0.00 | 0.00 | 1.00 | 1.00 | 1.00 |
Business Group | 0.49 | 0.50 | 0.00 | 0.00 | 0.00 | 1.00 | 1.00 |
Variable | Growth | Maturity | Decline |
---|---|---|---|
CSR | 64.34 | 63.64 | 62.85 |
Size | 19.98 | 19.65 | 19.67 |
Leverage | 0.33 | 0.37 | 0.32 |
ROA | 0.08 | 0.05 | 0.04 |
Accruals | −0.03 | −0.02 | −0.03 |
Big | 0.70 | 0.60 | 0.67 |
Business Group | 0.63 | 0.43 | 0.46 |
1. | 2. | 3. | 4. | 5. | 6. | 7. | 8. | 9. | 10. | 11. | |
---|---|---|---|---|---|---|---|---|---|---|---|
1. CSR | 1.00 | ||||||||||
2. Growth | 0.13 | 1.00 | |||||||||
(<0.01) | |||||||||||
3. Maturity | 0.00 | −0.27 | 1.00 | ||||||||
(0.98) | (<0.01) | ||||||||||
4. Decline | −0.18 | −0.19 | −0.32 | 1.00 | |||||||
(<0.01) | (<0.01) | (<0.01) | |||||||||
5. LifeCycle | −0.21 | −0.65 | −0.04 | 0.71 | 1.00 | ||||||
(<0.01) | (<0.01) | (0.34) | (<0.01) | ||||||||
6. Size | 0.18 | 0.06 | −0.08 | −0.05 | −0.08 | 1.00 | |||||
(<0.01) | (0.15) | (0.05) | (0.23) | (0.05) | |||||||
7. Leverage | −0.09 | −0.06 | 0.05 | −0.11 | −0.03 | 0.13 | 1.00 | ||||
(0.02) | (0.12) | (0.23) | (0.01) | (0.39) | (<0.01) | ||||||
8. ROA | 0.14 | 0.22 | −0.02 | −0.17 | −0.27 | 0.02 | −0.25 | 1.00 | |||
(<0.01) | (<0.01) | (0.62) | (<0.01) | (<0.01) | (0.56) | (<0.01) | |||||
9. Accruals | 0.01 | −0.05 | 0.06 | −0.05 | −0.01 | −0.15 | −0.06 | 0.14 | 1.00 | ||
(0.76) | (0.21) | (0.10) | (0.24) | (0.88) | (<0.01) | (0.12) | (<0.01) | ||||
10. Big | 0.09 | 0.03 | −0.09 | 0.01 | −0.05 | 0.36 | −0.06 | 0.05 | −0.05 | 1.00 | |
(0.02) | (0.46) | (0.02) | (0.90) | (0.22) | (<0.01) | (0.15) | (0.19) | (0.22) | |||
11. Business Group | 0.01 | 0.11 | −0.08 | −0.04 | −0.11 | 0.39 | 0.07 | −0.07 | −0.06 | 0.24 | 1.00 |
(0.87) | (0.01) | (0.04) | (0.33) | (0.01) | (<0.01) | (0.07) | (0.08) | (0.11) | (<0.01) |
Variable | Growth | Intermediate1 | Maturity | Intermediate 2 | Decline |
---|---|---|---|---|---|
Life cycle determinants | |||||
1. Sales growth rate | 0.16 | 0.09 | 0.04 | 0.02 | −0.02 |
2. Tangible, intangible assets growth rate | 0.12 | 0.08 | 0.04 | 0.01 | −0.02 |
3. Market-to-book ratio | 1.35 | 0.79 | 0.68 | 0.52 | 0.37 |
4. Employee growth rate | 0.08 | 0.05 | 0.02 | 0.01 | −0.02 |
5. Retained earnings ratio | 13.29 | 13.57 | 10.20 | 17.09 | 16.09 |
Overall CSR score | 64.34 | 64.02 | 63.64 | 63.51 | 62.85 |
Dependent Variable = CSR | |||||
---|---|---|---|---|---|
Independent Variables | (1) Growth | (2) Maturity | (3) Decline | (4) G-M-D | (5) LifeCycle |
Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | |
Intercept | 58.807 *** (40.28) | 58.347 *** (39.09) | 58.889 *** (40.11) | 59.133 *** (41.11) | 59.764 *** (40.29) |
Growth | 0.507 ** (2.38) | 0.429 * (1.88) | |||
Maturity | 0.124 (0.81) | 0.043 (0.25) | |||
Decline | −0.752 *** (−4.60) | −0.684 *** (−3.77) | |||
LifeCycle | −0.248 *** (−4.13) | ||||
Size | 0.271 *** (3.62) | 0.280 *** (3.67) | 0.268 *** (3.58) | 0.264 *** (3.59) | 0.262 *** (3.50) |
Leverage | −0.496 (−1.16) | −0.470 (−1.11) | −0.758 * (−1.78) | −0.765 * (−1.78) | −0.703 (−1.64) |
ROA | 5.271 *** (2.78) | 6.407 *** (3.35) | 5.060 *** (2.61) | 4.314 ** (2.21) | 4.060 ** (2.07) |
Accruals | −0.249 (−0.20) | −0.770 (−0.60) | −0.273 (−0.57) | −0.378 (−0.30) | −0.217 (−0.17) |
Big | 0.074 (0.44) | 0.077 (0.46) | 0.085 (0.52) | 0.084 (0.52) | 0.065 (0.40) |
Year | Included | Included | Included | Included | Included |
Industry | Included | Included | Included | Included | Included |
Adj. R-sq. | 0.4091 | 0.4036 | 0.4184 | 0.4205 | 0.4210 |
N. of obs. | 665 | 665 | 665 | 665 | 665 |
Panel A. Group-Affiliated Firms | |||
Dependent variable = CSR | |||
Independent Variables | (1) Growth | (2) Maturity | (3) Decline |
Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | |
Intercept | 59.119 *** (28.60) | 58.291 *** (26.82) | 58.822 *** (27.41) |
Growth | 0.922 *** (3.37) | ||
Maturity | 0.107 (0.40) | ||
Decline | −0.699 ** (−2.31) | ||
Size | 0.313 *** (3.17) | 0.312 *** (3.01) | 0.295 *** (2.89) |
Leverage | −0.717 (−0.93) | −0.573 (−0.75) | −0.726 (−0.95) |
ROA | 1.310 (0.41) | 3.946 (1.23) | 2.778 (0.85) |
Accruals | 0.559 (0.24) | −0.998 (−0.42) | −1.323 (−0.55) |
Big | −0.021 (−0.09) | −0.005 (−0.02) | 0.021 (0.08) |
Year | Included | Included | Included |
Industry | Included | Included | Included |
Adj. R-sq. | 0.4535 | 0.4324 | 0.4424 |
N. of obs. | 329 | 329 | 329 |
Panel B. Unaffiliated firms | |||
Dependent variable = CSR | |||
Independent Variables | (1) Growth | (2) Maturity | (3) Decline |
Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | |
Intercept | 62.711 *** (21.62) | 62.297 *** (21.56) | 62.925 *** (22.55) |
Growth | −0.117 (−0.26) | ||
Maturity | 0.268 (1.28) | ||
Decline | −0.902 *** (−4.39) | ||
Size | 0.251 * (1.75) | 0.267 * (1.88) | 0.248 * (1.80) |
Leverage | −0.464 (−0.78) | −0.460 (−0.79) | −0.805 (−1.41) |
ROA | 9.395 *** (3.27) | 8.311 *** (3.12) | 7.222 *** (2.80) |
Accruals | −0.089 (−0.05) | −0.208 (−0.13) | −0.072 (−0.05) |
Big | 0.123 (0.52) | 0.114 (0.49) | 0.121 (0.54) |
Year | Included | Included | Included |
Industry | Included | Included | Included |
Adj. R-sq. | 0.4102 | 0.4137 | 0.4356 |
N. of obs. | 336 | 336 | 336 |
Panel A. Soundness, Fairness, and Social contribution | |||
Dependent variable = CSR | |||
Independent Variables | (1) Soundness | (2) Fairness | (3) Social contribution |
Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | |
Intercept | 11.202 *** (10.28) | 23.463 *** (20.67) | 4.188 *** (4.09) |
LifeCycle | −0.181 *** (−3.39) | 0.019(0.55) | −0.161 *** (−3.89) |
Size | 0.307 *** (5.83) | −0.294 *** (−5.54) | 0.125 ** (2.58) |
Leverage | −1.491 *** (−3.84) | 0.119 (0.42) | 0.790 ** (2.48) |
ROA | 1.520 (1.04) | −0.511 (−0.41) | 5.267 *** (4.13) |
Accruals | −2.512 *** (−2.62) | 0.055 (0.07) | 2.254 ** (2.51) |
Big | 0.218(1.60) | −0.033 (−0.38) | 0.099 (0.89) |
Year | Included | Included | Included |
Industry | Included | Included | Included |
Adj. R-sq. | 0.4671 | 0.4107 | 0.2573 |
N. of obs. | 665 | 665 | 665 |
Panel B. Consumer protection, Environmental management, and Employee satisfaction | |||
Dependent variable = CSR | |||
Independent Variables | (1) Consumer protection | (2) Environmental management | (3) Employee satisfaction |
Coefficient (T-stat) | Coefficient (T-stat) | Coefficient (T-stat) | |
Intercept | 9.536 *** (14.65) | 1.756 *** (3.42) | 9.806 *** (12.24) |
LifeCycle | 0.011 (0.56) | 0.019 (0.93) | 0.053 (1.56) |
Size | −0.058 * (−1.94) | 0.235 ** (9.74) | −0.062 * (−1.69) |
Leverage | −0.058 (−0.40) | 0.131 (0.85) | −0.147 (−0.52) |
ROA | −1.630 ** (−2.36) | −0.121 (−0.21) | −0.443 (−0.44) |
Accruals | 0.043 (0.10) | 0.108 (0.26) | −0.098 (−0.13) |
Big | −0.043 (−1.05) | −0.016 (−0.27) | −0.169 * (−1.72) |
Year | Included | Included | Included |
Industry | Included | Included | Included |
Adj. R-sq. | 0.3552 | 0.4104 | 0.1766 |
N. of obs. | 665 | 665 | 665 |
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Lee, W.J.; Choi, S.U. Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea. Sustainability 2018, 10, 3794. https://doi.org/10.3390/su10103794
Lee WJ, Choi SU. Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea. Sustainability. 2018; 10(10):3794. https://doi.org/10.3390/su10103794
Chicago/Turabian StyleLee, Woo Jae, and Seung Uk Choi. 2018. "Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea" Sustainability 10, no. 10: 3794. https://doi.org/10.3390/su10103794
APA StyleLee, W. J., & Choi, S. U. (2018). Effects of Corporate Life Cycle on Corporate Social Responsibility: Evidence from Korea. Sustainability, 10(10), 3794. https://doi.org/10.3390/su10103794