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17 pages, 299 KiB

Open AccessArticle

Can Sustainability (ESG) Controversies Be Offset with Advertising? An Empirical Investigation into Advertising, Negative ESG, and Firm Value

by Nicole Hanson and Stacey Sharpe

J. Risk Financial Manag. 2025, 18(2), 86; https://doi.org/10.3390/jrfm18020086 - 5 Feb 2025

Viewed by 1163

Abstract

Can advertising improve firm value following an incident of negative sustainability (i.e., a negative environmental, social or governance (NESG) occurrence?) This study provides an empirical investigation into NESG, its individual domains, and the mitigating role of advertising on firm value. We investigate firm [...] Read more.

Can advertising improve firm value following an incident of negative sustainability (i.e., a negative environmental, social or governance (NESG) occurrence?) This study provides an empirical investigation into NESG, its individual domains, and the mitigating role of advertising on firm value. We investigate firm level ESG sustainability violations and any corresponding advertising expenditures, utilized to counter negative opinions. First, we examine whether an NESG occurrence reduces firm value. Next, we investigate if firms experiencing an NESG occurrence alter their advertising expenditures and assess the resulting impact of this advertising spending on firm value. Finally, we determine if certain NESG occurrences benefit more from advertising than others. Using a sample of firms which engaged in at least one NESG event between 1995 and 2019, we find that firms increase advertising as a way to engage in damage control. Increasing advertising expenditures to offset NESG occurrences ultimately impacts firm value. Specifically, increasing advertising helps to reduce the NESG occurrence’s effect on firm value, but the individual domains of ESG do not respond the same to advertising efforts, suggesting that advertising as a mitigation tool remains nuanced, with the greatest positive effect being for environmental crises, no significant effect for social crises, and a negative effect for governance crises. Full article

(This article belongs to the Special Issue Sustainability and CSR in Financial Management: Strategies and Risk Implications)

18 pages, 276 KiB

Open AccessArticle

Knowledge-Based Faultlines and Corporate Social Irresponsibility: Evidence from Chinese High-Polluting Companies

by Jingchen Ma and Xu Huang

Sustainability 2023, 15(17), 13156; https://doi.org/10.3390/su151713156 - 1 Sep 2023

Cited by 2 | Viewed by 1507

Abstract

Government requests and societal expectations have pressured high-polluting companies to focus on corporate social responsibility strategies. Using the upper echelons theory as a theoretical framework, we investigated how top management team (TMT) faultlines influence corporate social performance (CSP) based on data from 212 [...] Read more.

Government requests and societal expectations have pressured high-polluting companies to focus on corporate social responsibility strategies. Using the upper echelons theory as a theoretical framework, we investigated how top management team (TMT) faultlines influence corporate social performance (CSP) based on data from 212 high-polluting companies. The results showed that CSP can be improved by reducing corporate social irresponsibility (CSiR), knowledge-based faultlines have a U-shaped effect on CSiR, and there is a knowledge-based faultline critical point. This implies that knowledge-based faultlines can improve CSiR before reaching this critical point. Additionally, medium-strength knowledge-based faultlines are more conducive to improving irresponsible behavior. CEO power plays a significant moderating role in the relationship between TMT faultlines and CSiR and slows the U-shaped effect of knowledge-based faultlines on CSiR. These findings could help enterprises optimize team structures, adjust corporate social responsibility strategies, and maintain sustainable development in high-polluting sectors. Full article

(This article belongs to the Special Issue Business, Innovation, and Economics Sustainability)

16 pages, 457 KiB

Open AccessArticle

Consumer Response to Food Corporate Social Irresponsibility: Food Performance and Company Ethics Irresponsibility

by Weiping Yu, Dongyang Si and Jun Zhou

Behav. Sci. 2022, 12(11), 461; https://doi.org/10.3390/bs12110461 - 19 Nov 2022

Cited by 3 | Viewed by 3339

Abstract

Corporate social irresponsibility (CSI) seriously damages the rights and interests of stakeholders, particularly consumers. This study analyzes the consumer response to food performance irresponsibility and food corporate ethics irresponsibility by moral emotions. A situational simulation experiment was conducted with the following results: (1) [...] Read more.

Corporate social irresponsibility (CSI) seriously damages the rights and interests of stakeholders, particularly consumers. This study analyzes the consumer response to food performance irresponsibility and food corporate ethics irresponsibility by moral emotions. A situational simulation experiment was conducted with the following results: (1) Food performance irresponsibility has the greatest impact on consumer boycotts, while corporate ethics irresponsibility more often leads to consumers’ negative word of mouth (NWOM). (2) Moral emotions play a strong mediating role between CSI and consumers’ NWOM and boycott behavior. (3) Gender significantly moderates the propagation path from moral emotions to NWOM, and female consumers react more strongly to food performance irresponsibility. In conclusion, the paper offers empirical evidence of the effect food corporate social irresponsibility has on consumers’ different responses. Furthermore, it can help food enterprises to identify different CSI types and develop corresponding governance strategies. Full article

(This article belongs to the Special Issue Picturing Morality from Multidisciplinary Perspectives)

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20 pages, 496 KiB

Open AccessArticle

Corporate Social Responsibility Risk and Firm Performance: A Network Perspective

by Jiaqi Luo, Mingxiao Bi and Dandan Jia

Int. J. Financial Stud. 2022, 10(2), 40; https://doi.org/10.3390/ijfs10020040 - 1 Jun 2022

Cited by 4 | Viewed by 4541

Abstract

This study explored how corporate social responsibility (CSR) risk, social networks, and firm performance interacted in light of resource dependence theory and information asymmetry theory to bridge the literature gap between CSR risk and firm performance under the conditions of China’s network. We [...] Read more.

This study explored how corporate social responsibility (CSR) risk, social networks, and firm performance interacted in light of resource dependence theory and information asymmetry theory to bridge the literature gap between CSR risk and firm performance under the conditions of China’s network. We used data from Shanghai and Shenzhen A-share listed firms in China from 2010 to 2019 to conduct a social network analysis and random-effects GLS regression analysis. The study revealed the following: (1) CSR risk hurts financial performance, while structural holes and network density attenuate this effect; (2) CSR risk positively impacts capital performance, which is amplified by closeness centrality; (3) CSR risk harms innovation performance, while betweenness centrality and network density mitigate this effect. Despite CSR risk bringing short-term benefits, this effect is not sustained. Generally, CSR risks are more detrimental to firms than beneficial. In this study, we strengthen the basis of the research on CSR risk and firm performance, along with research on social networks, advising firms to avoid CSR risks and utilize their networks to mitigate such risks and achieve a better performance. Full article

(This article belongs to the Collection Corporate Social Responsibility in Finance)

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17 pages, 469 KiB

Open AccessArticle

Corporate Social Practices and Firm Financial Performance: Empirical Evidence from France

by Sonia Boukattaya and Abdelwahed Omri

Int. J. Financial Stud. 2021, 9(4), 54; https://doi.org/10.3390/ijfs9040054 - 28 Sep 2021

Cited by 9 | Viewed by 5868

Abstract

The present work aimed to examine the association between Corporate Social performance (CSP) and corporate financial performance (CFP) taking into account corporate social irresponsibility. Here, we used a sample of French non-financial firms listed on SBF 120 between 2011 and 2016. Our findings [...] Read more.

The present work aimed to examine the association between Corporate Social performance (CSP) and corporate financial performance (CFP) taking into account corporate social irresponsibility. Here, we used a sample of French non-financial firms listed on SBF 120 between 2011 and 2016. Our findings provided evidence that corporate social responsibility (CSR) and corporate social irresponsibility (CSI) exert opposite effects on the CFP. Using an estimation of the vector autoregressive (VAR) model for panel data, we showed that the CSI has a greater and more lasting impact on CFP than CSR. Full article

(This article belongs to the Collection Corporate Social Responsibility in Finance)

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14 pages, 292 KiB

Open AccessArticle

Impact of Board Gender Diversity on Corporate Social Responsibility and Irresponsibility: Empirical Evidence from France

by Sonia Boukattaya and Abdelwahed Omri

Sustainability 2021, 13(9), 4712; https://doi.org/10.3390/su13094712 - 22 Apr 2021

Cited by 46 | Viewed by 8796

Abstract

While prior studies have investigated the impact of corporate governance mechanisms on corporate social responsibility (CSR) commitment, researchers have scantly studied the potentially important relationship between board gender diversity and corporate social responsibility and irresponsibilityseparately. Drawing on the social role theory and feminist [...] Read more.

While prior studies have investigated the impact of corporate governance mechanisms on corporate social responsibility (CSR) commitment, researchers have scantly studied the potentially important relationship between board gender diversity and corporate social responsibility and irresponsibilityseparately. Drawing on the social role theory and feminist ethics, we hypothesizethat board gender diversity is positively associated with CSR and negatively associated with corporate social irresponsibility (CSI).Here, we relied on a sample of French non-financial companies listed on the SBF 120 index between 2011 and 2016. Our results provide evidence on the positive impact of board gender diversity on CSR and the negative one on CSI. We show that women have a stronger impact on reducing CSI than on enhancing CSR. Our findings were robust to the different estimation methods. Full article

(This article belongs to the Special Issue Sustainable Finance: New Trends, Environment and Social Changes)

18 pages, 521 KiB

Open AccessArticle

Effects of Corporate Social Responsibility on Firm Performance: Does Customer Satisfaction Matter?

by An-Pin Wei, Chi-Lu Peng, Hao-Chen Huang and Shang-Pao Yeh

Sustainability 2020, 12(18), 7545; https://doi.org/10.3390/su12187545 - 13 Sep 2020

Cited by 38 | Viewed by 12513

Abstract

Academic research has shed light on the empirical relationships among a firm’s corporate social responsibility (CSR), corporate social irresponsibility (CSiR) and firm performance and on the firm’s customer satisfaction–firm performance relationship in different markets. However, little notice has been taken of whether the [...] Read more.

Academic research has shed light on the empirical relationships among a firm’s corporate social responsibility (CSR), corporate social irresponsibility (CSiR) and firm performance and on the firm’s customer satisfaction–firm performance relationship in different markets. However, little notice has been taken of whether the coexistence of corporate social responsibility, corporate social irresponsibility and customer satisfaction has an interactive effect on firm performance. This study aims to examine the effects of their interaction on firm performance from an investment perspective. Using unbalanced panel regression to test a sample of publicly traded firms from the United States, this study finds that, in general, firms with higher customer satisfaction earn positive changes in abnormal stock returns. For firms that engage in CSR, CSR positively affects corporate performance, whereas firms’ social irresponsibility activities reduce firms’ financial performance. All else equal, a positive interactive effect of CSiR and customer satisfaction on stock return was observed. The results reveal that high customer satisfaction can alleviate the negative effect of corporate social irresponsibility on firms’ financial performance. Our findings will help management executives and investors to understand that the negative effect of a firm’s unforeseen events on firm performance can be weakened by increasing customer satisfaction. Full article

(This article belongs to the Special Issue Sustainable Investment and Finance)

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16 pages, 1255 KiB

Open AccessArticle

Optimal Decisions and Coordination in a Socially Responsible Supply Chain with Irresponsibility Risk

by Qian Wang, Yongguang Zhong and Guangye Xu

Sustainability 2019, 11(24), 7252; https://doi.org/10.3390/su11247252 - 17 Dec 2019

Cited by 1 | Viewed by 3051

Abstract

Many companies make some stakeholders pleased but others cannot. To help understand why, it is very important to study the coexistence of corporate social responsibility (CSR) and corporate social irresponsibility (CSI). This paper considers a manufacturer with irresponsibility risk in a centralized and [...] Read more.

Many companies make some stakeholders pleased but others cannot. To help understand why, it is very important to study the coexistence of corporate social responsibility (CSR) and corporate social irresponsibility (CSI). This paper considers a manufacturer with irresponsibility risk in a centralized and decentralized socially responsible supply chain, and uses a Stackelberg game to investigate the optimal policies on price and CSR investment level. This paper also examines the influence of consumer responsibility awareness and CSR investment efficiency on the decision behaviors of the manufacturer and retailer. Moreover, we developed a new mechanism to coordinate the decentralized supply chain system, which consists of the retailer participating in CSR and revenue sharing. Our results indicate that the manufacturer’s and retailer’s optimal decisions may not be significantly influenced by consumer responsibility awareness, but the effect of CSR investment efficiency is significant. Our results also show that if the degree of retailer participation and the proportion of revenue sharing are of moderate size, then not only can the contract mechanism coordinate the decentralized socially responsible supply chain, but it can ensure that a win–win situation can be achieved by the supply chain members. Full article

(This article belongs to the Special Issue Sustainable Operations and Supply Chain Management)

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