The moderating role of CEO nationality, gender,
and education on the relation between regulatory
quality and a firm’s CSP
MSc International Business and Management, Semester 2A 2019 Master thesis
Author:
Maurice Apeldoorn (s2533456); Email: m.c.apeldoorn@student.rug.nl
Supervisor:
Dr. E. Mendiratta; Email: e.mendiratta@rug.nl
Co-assessor:
Dr. J. Shin; Email: j.shin@rug.nl
Faculty of Economics and Business
University of Groningen
Duisenberg Building, Nettelbosje 2, 9747 AE Groningen, Netherlands
P.O. Box 800, 9700 AV Groningen, Netherlands
http://www.rug.nl/feb
2
ABSTRACT
The objective of this thesis is to empirically examine the impact of regulatory quality on CSP and whether this relation is moderated by CEO gender, nationality, and education. Building upon institutional theory, this paper argues that a country’s regulatory quality is likely to positively influence a firm’s CSP. In addition, the upper echelon theory is used to argue to what extent CEO characteristics moderate this relationship. The analysis of the 222 companies and 335 CEO’s featuring in the Forbes Global 300 of 20181 suggests that regulatory quality is
negatively associated with a firm’s CSP. Moreover, results have shown that CEO nationality negatively moderates the relation between regulatory quality and a firm’s CSP. Finally, CEO gender and education are found to have no moderating effect on the relationship between regulatory quality and CSP. These results, albeit contrary to the propositions developed in this research, propose several important implications for both theory and managers, while simultaneously raising questions that form the basis for the given directions for future research.
Keywords: Corporate social responsibility, Corporate social performance, Institutional theory, CEO characteristics, Upper echelon theory, Cross-regional comparison
3
TABLE OF CONTENTS
1. Introduction 4
2. Theoretical framework 7
2.1 Institutional theory and CSP 7
2.2 Upper echelon theory and CSR 10
2.3 Nationality and CSR 12
2.4 Gender and CSR 13
2.5 Educational Background and CSR 14
4 1. INTRODUCTION
Corporate social responsibility (CSR) defined by Aguinis (2011: 855) as “context-specific
organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” has increasingly
gained importance over the past decades (Barrena Martínez, López Fernández, Miguel, & Fernández, 2016). As a result, parties that are affected by a firms behaviour demand that businesses behave in a CSR friendly manner (Barrena Martínez et al., 2016). As a result, the institutional context of countries changes which increases the complexity for firms that seek to expand internationally (Berry, Guillén, & Zhou, 2010). To illustrate the increasing demand for CSR friendly behaviour, a recent study by Cone Communications (2017) found that 76% of the American population refuses to buy products from companies that express behaviour contrary to their beliefs. Next to that, 63% of this population is found to demand companies to drive social and environmental change (Cone Communications, 2017), leading literature to promote corporate social performance (CSP) as a key tool to meet society’s demands and consequently increase the firm’s competitiveness (Aguilera, Rupp, Williams, & Ganapathi, 2007; Boulouta & Pitelis, 2014; Carroll & Shabana, 2010). In order to facilitate an increase in firm’s CSP, governments have issued regulations and policies that aim to push companies towards CSR friendly behaviour (Steurer, 2010; Sarkar, 2008). As a result, the regulations and policies regarding CSR related manners have tripled since 2010 (The Worldbank, 2018).
5 In summary, literature on institutional theory and regulatory quality is important in explaining firm’s behaviour. However, research on the institutional level fails to effectively explain why firms that are active within the same institutional environment, behave differently (Ortiz-de-Mandojana, Aguilera-Caracuel, & Morales-Raya, 2016). Nonetheless, previous studies incorporating CSR as the dependent variable mainly focussed on the effect of public policies, market forces, and the effect of welfare states (Lyon & Maxwell, 2008) leaving drivers on the individual level out of their scope. This is striking as Berrone et al. (2013) in their study on the effect of laws and regulations, pointed out that more research on the individual level is necessary. It is namely unclear what effect internal processes have on the behaviour of firms within the set boundaries of institutional context (Berrone, Fosfuri, Gelabert, & Gomez-Mejia, 2013).
Currently, this effect is still unclear as few studies explain the effect of institutional pressures on CSR related concepts while taking possible influences on the individual level into account (Idowu, 2018). To that notion, Waldman and Siegel (2008) argue that a firm’s decision to increase its CSP is a strategic choice. Next to that, the upper echelon theory proposes that an executive’s cognitions, values, and perceptions influence a firm’s strategy (Hambrick & Mason, 1984). CEO characteristics and demographics usually serve as proxies for these cognitions, values, and perceptions (Carpenter, Geletkanycz, & Sanders, 2004; Mazutis, 2013). Thus, it seems that CEO characteristics influence a firm’s level of CSP. However, studies that link CEO characteristics with CSR related concepts are rare (Busenbark, Krause, Boivie, & Graffin, 2016) and those that did, found effects for a CEO’s education and gender but did not research its nationality (Busenbark et al., 2016; Mazutis & Zintel, 2015). The lack of interest in the effect a CEO’s nationality has is unexpected because previous literature has pointed out that one’s nationality shapes personal values and attitudes (Hofstede & McCrae, 2004), which in turn seem to influence one’s perception on CSR (Husted, 2005).
6 this research aims to provide meaningful insights regarding the effect of regulatory quality on CSP and the possible moderating influence of a CEO’s nationality, education and gender, by answering the research question: “Does regulatory quality influence a firm’s CSP and is this
moderated by the CEO’s gender, nationality and education?”
This paper contributes to existing literature through incorporating predictors of CSP on both the institutional and individual level in one model, which shows how these concepts are linked, increasing our understanding of reality. Additionally, this paper aims to deepen our understanding about institutional theory and its link with CSP. Finally, this paper identifies a CEO’s nationality as an important moderator on the link between regulatory quality and CSP.
7 2. THEORETICAL FRAMEWORK
In order to sufficiently answer the central question of this research, this thesis elaborates on the two theories that form the theoretical bases on which scholars in comparative CSR and executive characteristics literature form their arguments. These theoretical bases are derived from institutional theory regarding the influence of broad societal pressures on firm’s CSP (Aguins & Glavas, 2012), and the upper echelon theory regarding the moderating effect of CEO characteristics (Mazutis, 2013) This section will elaborate on the theoretical backbone of the two theories named above, as well as giving a literature overview on the influence of regulatory pressures and CEO characteristics on CSP.
2.1 Institutional theory and CSP
Even though CSR has been widely discussed within literature (e.g. Aguinis & Glavas, 2012; Campbell, 2006; Gjølberg, 2009; Huang, 2013; Jackson & Apostolakou, 2010; Manner, 2010; Miska, Szőcs, & Schiffinger, 2018; Myung et al., 2017;Young & Makhija, 2014), scholars have been unable to find a universally accepted definition (Idowu, 2018; Jackson & Apostolakou, 2010; Young & Makhija, 2014). For example, Barnett (2007: 801) defined CSR as “a
discretionary allocation of corporate resources toward improving social welfare that serves as a means of enhancing relationships with key stakeholders”. Extending the previous definition,
Aguinis (2011: 855) defined CSR as “context-specific organizational actions and policies that
take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance”. Hence, it is clear there is an ongoing debate about the meaning
of CSR. However, scholars agree upon the fact that an organisation’s CSR practices are focused towards the fulfilment of their stakeholders’ economic, legal and ethical expectations at a certain time within a certain context (Carroll, 1979,1991; Dahlsrud, 2006; Idowu, 2018; Sarkar & Searcy, 2016).
The fact that CSR is context and time dependent is one of the main reasons that a universal definition of CSR is absent. That is, due to institutions across national business systems being different, the context and roles for various stakeholders differ as well (Matten & Moon, 2008). In the search to define CSR in its most comprehensive way, Barrena Martínez et al. (2016) found no consensus on the definition of social responsibility. However, they point out that the definition of CSR given by the European Commission suits best (Barrena Martínez et al., 2016). This definition is as follows: “the process of integration in the organizational activities of
8
objectives: (1) to maximize value creation for these parts, and (2) to identify, prevent and mitigate the adverse effects of organizational actions on the environment” (European
Commission, 2011). The main reason for adopting this definition as the most suitable one is that it takes the notions of both institutional and stakeholder theory into account (Barrena Martínez et al., 2016). Focussing on institutional theory, the definition above finds its origin in the conceptualization of CSR by Bowen (1953) and Sethi (1975) who point out that CSR is the behaviour of firms that is coherent with the prevailing norms, values and expectations of society. This conceptualisation is based on the assumption that firms seek to increase their legitimacy.
Legitimacy reflects the perception of society that, when prevailing norms, values, and beliefs are taken into account, a firm’s existence is desirable and worthy(DiMaggio & Powell, 1983, 1991). This is in line with the rational of institutional theory. This theory proposes that organisations are influenced by the institutional rules and norms of society through coercive, normative, or mimetic isomorphism (Dimaggio & Powell, 1983). Coercive isomorphism is normally a result that stems from formal and informal institutions that exert pressure on firms to behave in a certain manner (Dimaggio & Powell, 1983). Mimetic isomorphism derives from uncertainty which causes a firm to imitate a competitor to increase its own perceived legitimacy (Dimaggio & Powell, 1983). The final source of isomorphism is a normative one which stems primarily from professionalisation (Dimaggio & Powell, 1983). Regarding CSR, this perspective suggests that firm’s CSR related behaviour is based upon their understanding of prevailing norms and existing practices, as actors within the firm continuously seek to increase their internal and external legitimacy (Jackson & Apostolakou, 2010). These prevailing norms and existing practices are seen as institutional pressures. The rational of Jacskon & Apostolakou (2010) is further supported by empirical evidence which shows that firms who effectively respond to the mechanisms of isomorphism indeed increase their desirability by public institutions and a wide range of their community stakeholders (Schultz & Wehmeier, 2010).
9 operationalized term of CSR. Building on the corresponding model that Carroll (1979) produced, Wood (1991, p.693) defined CSP as: “a business organization’s configuration of
principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationships”. Comparing this
definition with the definition of CSR given by the European Commission (2011), it is clear that CSP identifies the outcomes of the processes described in the definition of CSR (Wood, 2010). To that notion, Wood (2010) concluded in her comprehensive review of CSP literature that the link between CSR and CSP led to the fact that much of literature addresses CSP and its core processes without actually calling it CSP (Wood, 2010). Therefore, this research will use both CSP and CSR related research in forming the arguments that will lead to the hypothesis.
Considering the above, a significant amount of literature operationalises the degree of CSR as CSP (Aguinis & Glavas, 2012; Bies, Bartunek, Fort, & Zald 2007; Gardberg & Fombrun, 2006; Idowu, 2018; Marquis, Glynn, & Davis, 2007; Matten & Moon, 2008; Young & Makhija, 2014). Using institutional theory, CSP has been linked with various determinants among both formal and informal institutions. Informal institutions usually refer to the cultural aspects of society where formal institutions are represented by the legal authorities (Halkos & Skouloudis, 2016). Focussing on informal institutions, Gjølberg (2009) found that organisations operating in countries with strong institutions (e.g. political culture, strong corporatism and an active state) are more likely to score high on CSP. On the other hand, Jackson and Apostolakou (2010) found that the liberal market economies of the Anglo-Saxon countries score higher on CSP than their counterparts that operate in the more coordinated economies in continental Europe. Finally, Hartmann & Uhlenbruck (2015) findings of their worldwide study supported this as they found that companies are more likely to engage with environmentally friendly practices when they operate in liberal markets with a high degree of press freedom and non-governmental organisations. Hall & Soskice (2011) gave a possible explanation for these results as they argued that higher governmental involvement may negatively affect a firm’s creativity and innovation. So, although findings are mixed, it seems that in terms of CSP, organisations benefit from an economic market with liberal characteristics.
10 main determinants of firms’ CSR practices (Henriques & Sadorsky, 1996; Dasgupta et al., 2000; Chan & Welford, 2005; Sarkar, 2008). The rationale behind these findings is that regulatory pressures that naturally arise in the form of laws and rules, guide organisational behaviour by the threat of legal sanction (Ortiz-de-Mandojana et al., 2016). Hence, firms normally comply with regulations due to the fear of suffering the penalty of non-compliance (Dimaggio & Powell, 1983). The ability of a government to formulate and implement such regulations is referred to as the regulatory quality of a country (Daude & Stein, 2007). Regarding this ability, Berrone et al. (2013) found that strict regulations can motivate companies to adopt positive attitudes towards CSR and actively undertake actions to increase their CSP. Building on these arguments, studies found that these regulatory pressures differ in intensity across countries as some countries have established more stringent regulations than others (Albareda, Lozano, & Ysa, 2007; Idowu, 2018; Li et al., 2017). For example, Li et al. (2017) found that the Chinese government plays a crucial role in pressuring firms to pollute less through stringent laws and regulations. However, they also argue that the need for the stringency of the regulations are caused by the unique institutional background of China (Li et al, 2017). Using the same rational, Albareda et al. (2007) formulated 4 models regarding governmental involvement in the development of CSR that differed in stringency in order to account for the country differences present among the EU-15 countries.
To summarise, the regulatory quality of countries is important in determining the differences of the legal institutional context across countries (Halkos & Skouloudis, 2016). This leads this research to adopt the perspective that a country’s regulatory quality is positively associated with a firm’s CSP:
H1: Country regulatory quality is positively associated with a firm’s CSP.
2.2 Upper echelon theory and CSP
11 Toffel, 2012; Idowu, 2018). One of the main areas scholars identified for further investigation is the effect which managers’ personal characteristics have on the processes that determine a firm’s CSP (Delmas & Toffel, 2012). Studies also show that a CEO has a major impact on a firm’s strategy (Mazutis, 2013; Waldman et al., 2006a, 2006b). Hence, this study intends to determine how CEO characteristics influence an organisation’s CSP related behaviour.
In order to sufficiently determine the effect CEO characteristics have on a firm’s behaviour, performance scholars often use the upper echelon theory as defined by Hambrick & Mason (1984) (Carpenter et al., 2004; Godos-Díez, Fernández-Gago, & Martínez-Campillo, 2011; Manner, 2010; Mazutis, 2013; Peterson, Galvin, & Lange, 2012). This theory proposes that an executive’s cognitions, values, and perceptions influence a firm’s strategy and ultimately, its performance (Hambrick & Mason, 1984). Since cognitions, values, and perceptions are hard to measure scholars often use observable variables such as demographics as proxies (Carpenter et al., 2004; Mazutis, 2013). By using the upper echelon theory, scholars have been able to identify many proxies that are related to a firm’s strategy and performance (Busenbark et al., 2016).
However, just a few of these have been tested in relation to a firm’s attitudes and practices that increase its CSP (Busenbark et al., 2016). When done so, scholars often tested the effect of proxies such as educational background and gender, which produced mixed results (Busenbark et al., 2016; Manner, 2010; Mazutis, 2013). Furthermore, a CEO’s nationality is clearly absent among the list of proxies (Busenbark et al., 2016). Namely, when addressing the literature in the field of culture and its influence on one’s characteristics, culture has been shown to be an important predictor (García-Meca, Uribe-Bohórquez, & Cuadrado-Ballesteros, 2018; Matthiesen & Salzmann, 2017). Scholars in this field argue that the cultural context of a nation affects a person his values and characteristics (Hofstede & McCrae, 2004). Hence, a person or director’s attitudes towards CSR related matters are rooted in culture (Husted, 2005). Therefore, this study includes, in addition to gender and education, nationality as a characteristic of importance regarding the effect that a CEO may have on a firm’s CSP influencing behaviour.
12 direct effect that a CEO has on a firm’s CSR. In conformity, previous studies found some evidence that suggest a moderating effect of CEO characteristics on the relation between institutional forces and a firm’s CSR activities (Bajo, Bigelli, Hillier, & Petracci, 2009; Wu, 2009). That is, these studies found a link between CEO’s characteristics and the differences in response on CSR related regulations. For example, Wu (2009) found that a CEO’s values matter regarding a firm’s violation or overcompliance with the regulations present in the environment. This is based on their preference for either social and environmental or profit performance (Nakamura et al., 2001). Hence, with the application of the upper echelon theory, one can argue that a CEO’s characteristics have effect on the degree to which a firm is affected by the regulatory quality of its institutional environment. Therefore, this study analyses the moderating effect of a CEO’s education, gender and nationality on the relation between regulatory quality and a firm’s CSP.
2.3 Nationality and CSP
Considering that Idowu (2018) pointed out that CEO nationality is an important predictor of CSR, it is surprising that it has received little attention in literature (Mazutis & Zintel, 2015). The few studies that did are quite recent and found mixed results. Louis and Osemeke (2017) found that the adoption of processes that determine CSP differ between directors with different ethnicity, and Huang (2013) found that CEO nationality is not linked with a firm’s level of CSP. However, none of these studies focus on the reason for the difference in response regarding the regulations towards CSR which is, as explained previously, an important factor in determining the possible moderating effect CEO characteristics have on the relation between regulatory quality and a firm’s CSP. As argued in the previous section, a CEO’s values are one of these determinants (Wu, 2009). So, in order to determine the moderating effect a CEO’s nationality might have, one should inspect the effect a CEO’s nationality has on their values.
13 difference in their perception of CSR (Kuznetsov et al., 2009; Fifka & Pobizhan, 2014). Hence, it is reasonable to suspect that a CEO originating from a country with a relatively high regulatory quality towards CSR will be more likely to respond more positively towards CSR related regulations than a CEO originating from a country with a lower regulatory quality, and visa-versa. Therefore, this paper adopts the perspective that, depending on the regulatory quality of his or her country of origin, the foreign CEO can both positively and negatively influence the effect the regulatory quality has on a firm’s CSP. This results in the following hypotheses:
H2a: When the CEO is a foreigner and originates from a country with a lower regulatory quality than the firm’s home country there will be a weaker positive relation between the regulatory quality of a country and the CEO’s firm’s CSP
H2b: When the CEO is a foreigner and originates from a country with a higher regulatory quality than the firm’s home country there will be a stronger positive relation between the regulatory quality of a country and the CEO’s firm’s CSP
2.4 Gender and CSP
14 generally are more CSR invested than their male counterparts. Therefore, they are more likely to respond positively towards the regulations on CSR which are present within their institutional environment (Nakamura et al., 2001; Wu, 2009). Hence, this paper argues that the effect that the positive effect regulatory quality has on a firm’s CSP is strengthened when the CEO is of the female gender:
H3: When the CEO is a female there will be a stronger positive relation between the regulatory quality of a country and the CEO’s firm’s CSP
2.5 Educational background and CSP
The effect that a CEO’s educational background has on its company’s CSR practices has been researched extensively (Manner, 2010; Mazutis, 2013; Slater & Dixon-Fowler, 2010). These studies generally suggest that a CEO having a degree in economics negatively influences a firm’s CSR due to the lack of ethics present in these programs. While Manner (2010) and Mazutis (2013) found supporting evidence for this hypothesis, Slater (2010) found that a CEO having an MBA degree resulted in a higher form of CSP. Furthermore, Frank et al. (1993) found that education shapes values and beliefs, and Arce (2004) found that ethical values are merely taught in the field of economics. However, the latter is changing as a study based on the
Financial Times top 50 global MBA programs of 2006 found that CSR is increasingly
incorporated in the curriculum (Christensen et al., 2007). This study found that in comparison with a study from 1988, there has been a fivefold increase in the number of courses on ethics within the studied MBA curricula (Christensen, Peirce, Hartman, Hoffman, & Carrier, 2007). Next to that, students are found to show more interest in these courses (Christensen et al., 2007). However, although consisting of universities present all around the world, the sample Christensen et al. (2007) used mainly consisted of universities based in the USA. Later research that used a more substantial and diverse sample, confirmed the trend found by Christensen et al. (2007) (Rasche, Gilbert, & Schedel, 2013). That is, Rasche et al. (2013) found based on data underlying the Beyond Grey Pinstripes survey, that the amount of ethic related courses in business schools has doubled between 2005 and 2009.
15 in MBA programs may increase the likelihood of (future) CEOs who followed these programs to prefer social and environmental performance over profit performance. Simultaneously, the likelihood of a CEO responding positively to the regulations towards CSR present in its institutional environment will increase as well (Nakamura et al., 2001; Wu, 2009). The previous rational in combination with the fact that less ethical education results in a lack of emphasis on CSP (Arce, 2004), makes this thesis adopt the perspective that a CEO having an MBA degree increases the effect the regulatory quality has on the CEO’s firm’s CSP:
H4: When a CEO has an MBA degree there will be a stronger positive relation between the regulatory quality of a country and the CEO’s firm’s CSP than when the CEO does not have an MBA degree.
16
3. METHODOLOGY
This section will elaborate on the research design used to test the hypotheses of this paper. In order to answer the research question “Does regulatory quality influence a firm’s CSP and is
this moderated by the CEO’s gender, nationality and education?”. This thesis adopted a
quantitative research design. The reason for adopting this design is derived from the research onion as proposed by Saunders, Lewis and Thornhill (2007). Here, they state that when researching an objective reality, a quantitative research design fits best and that management behaviour is a typical example of an objective reality (Saunders, Lewis and Thornhill, 2007). Since the research question of this study aims to determine management behaviour in relation towards its institutional environment one can argue that his paper researches an objective reality.
3.1 Sample
17 different home countries and are active in 31 industries. Further details regarding this sample can be found in Table 1.
3.2 Data
The data was collected from several existing databases such as BoardEx, Orbis and Datastream. BoardEx was used to acquire the necessary data regarding CEO’s their nationality, gender and education. This platform offers a comprehensive database containing profiles for more than 380.000 managers and directors worldwide and has been shown to be a reliable source of data when used in research on managers and directors (Lewis, Walls, & Dowell, 2014; Walls & Hoffman, 2013). The ASSET4 database present within Thomson Reuters’ Eikon has been used to obtain the data for identifying companies their CSP as of the end of 2017. Furthermore, regulatory quality for the year of 2017, was acquired from the Worlbank’s Worldwide Governance Indicators. Lastly, Orbis and Hofstede’s cultural dimension scores were used to acquire data regarding the control variables. Where necessary, annual reports and LinkedIn profiles were used to fill in missing data. All data regarding the control variables origins from 2018.
3.3 Variables
Independent variable
Building on the literature review in the previous section, the independent variable is regulatory quality. This variable has been represented by the regulatory quality indices of World Bank's Worldwide Governance Indicators (WGI) for 2018. This database offers indicators for, among others, the regulatory quality of 215 countries for the years 1996-2018. In this database regulatory quality captures: “Perceptions of the ability of the government to formulate Companies’ home country Number of companies
Australia 3 Brazil 5 Britain 11 Canada 5 China 20 France 14 Germany 17 Honkong 11 India 5 Italy 4 Japan 25 Luxembourg 1 Malaysia 1 Mexico 1 Netherlands 5 Russia 4 Saudi Arabia 1 Singapore 1 South Korea 7 Spain 5 Sweden 1 Switzerland 3 Taiwan 2 Thailand 1 USA 69
18
and implement sound policies and regulations that permit and promote private sector development” (Worldwide Governance Indicators, 2018). Based on several criteria, countries
are given an indicator for their regulatory quality ranging from approximately -2.5 to 2.5 (Worldwide Governance Indicators, 2018). Furthermore, the database includes countries from all over the world, ranging from South-East Asia to North America (Worldwide Governance Indicators, 2018).
Dependent variable
The dependent variable was the CSP of a firm. This variable was represented by the CSR rating derived from the ASSET 4 database. This database offers environmental/social/governance (ESG) scores based on 226 key performance indicators (Thomson Reuters, 2013). Several studies have used the ESG scores from the ASSET4 database to effectively identify a company’s CSR activities (Hartmann & Uhlenbruck, 2015; Miska et al., 2018) which shows that the ESG scores present in this database are an reliable way to measure a company’s CSP
Moderating variable
The first moderating variable is CEO nationality which has been represented by the difference between the regulatory quality of the CEO’s nationality and the home country of the company the CEO works for. This difference was obtained through subtracting the regulatory quality score of the company’s home country from the regulatory quality of the country the CEO originates from. The result of the subtraction has been represented by the variable “CEO Regulatory quality”. The other 2 moderating variables were CEO gender and educational background and have been operationalised in a binary way. CEO gender has received a 0 for male and a 1 for female. Finally, CEO educational background has received a 1 when the CEO has an MBA degree and a 0 when that is not the case. As explained above, data on these variables were acquired through BoardEx and checking the CEO’s CV which were normally provided by the corporate’s website. When these two sources were not sufficient, their data were completed through checking the executive’s LinkedIn profile.
Control variables
19 The first variable present on the country level that has been shown to influence CSP is the size of the economy (Hartmann & Uhlenbruck, 2015) which has been operationalised by using a country’s gross domestic product (GDP) and was obtained by assessing the Worldbank’s Global Development data. Next to that, extensive previous literature has shown that cultural indexes as identified by Hofstede’s original 4 cultural dimensions significantly impact a firm’s CSP (Haxhi & van Ees, 2010; Ho, Wang, & Vitell, 2012; Ioannou & Serafeim, 2012). Therefore, the cultural indexes for power distance, uncertainty avoidance, masculinity and individualism were included as control variables.
On firm level, a control variable for firm size has been included since previous research indicates that it may influence CSP (Johnson & Greening, 1999). Furthermore it is likely that larger firms receive more public attention and are therefore, according to the rational of institutional theory, under higher pressure to engage in processes that determine CSP ( Hackston & Milne, 1996; Udayasankar, 2008). Thus, firm size has been included as a control variable and represented by the total assets of the firm.
Finally, previous research indicates that resources and profitability affect several aspects of CSP as well (Seifert, Morris & Bartkus, 2004). Therefore, firm performance in terms of return on assets (ROA) has been included as a control variable. All firm level control variables were obtained through assessing Orbis.
3.4 Analysis
In order to test the hypotheses of this research, I conducted several statistical analyses with the use of the program Stata. More specifically an ordinary least square (OLS) regression has been used to test for the relation between regulatory quality and a firm’s CSP where after a moderation analysis was conducted to test the nature of the interaction effects that were found to be significant. To control for firm size, firm performance, GDP and national culture I tested the relationship between the control variables and CSP both separate and incorporated within the regression with CSP and regulatory quality.
20 variables. The outcome of this model showed that the residuals of my model were normally distributed. That is after computing an inter quartile test on the residuals of the regression model between CSP and regulatory quality 0 severe outliers were identified. When the control variables were incorporated this test only identified 1 severe outlier
In order to test for multicollinearity, the variance inflation factor (VIF) has been used. This method has proved to be a reliable one by previous studies (Fetscherin et al., 2010). For the majority of the models that are tested in the next section, there is no case of multicollinearity as the VIF of every variable incorporated in these models is below 10, which is necessary to infer non-collinearity (Bowerman and O’Connell, 1990). The models without a case of multicollinearity were Model 1 (mean 1,95), Model 2 (mean 2,43), Model 4 (mean 3,23) and Model 5 (mean 3,27). However, Model 3 and 6 showed cases of multicollinearity among the dependent variable regulatory quality (VIF 5,30), the moderating variable CEO regulatory quality (VIF 11,24) and the interaction term composed out of these two variables (VIF 12,96). In order to solve this case of multicollinearity I standardized both regulatory quality and CEO regulatory quality as proposed by Friedrich (1982). This solved the case of multicollinearity for the mentioned variables and models.
21
4. Results
4.1 Descriptive statistics
Table 2 presents the mean, standard deviation, minimum and maximum for all variables including control variables. The independent variable regulatory quality is standardised and ranges from -1,78 to 0,86 with an average of 0,00. The dependent variable CSP ranges from 20,65 till 92,21 with a mean of 71,65.
When I focus on the control variables one can observe that the Power index ranges from 31 till 100 with an average of 52,11, Individualism ranges from 17 to 91 with an average of 59,68, Masculinity ranges from 5 till 95 with a mean of 63,86 and the Uncertainty avoidance index ranges from 8 till 95 with an average of 61,34. Furthermore GDP (measured in trillion US$) had a minimum of 62,32 and a maximum of 19485.39 trillion US dollars with an average of $7423,83 tr. Finally, Firm size measured by million US$ ranges from 13,05 to 4006,24 with an average of 384,42 and ROA ranges from -19.91 till 30,76 with an average of 5,03.
Finally, the moderating variables show us that the difference between the regulatory quality of the CEO’s nationality and the regulatory quality of its company’s home country (CEO Regulatory quality (S)) is standardised and ranges from -2,15 till 2,19 with an average of -0,00. This indicates that the CEOs present in this sample originate more often from a country with a lower regulatory quality than the home country of the company they work for. CEO Gender, measured by a dummy variable as explained in the methodology section, shows us that 4% of
Variable Obs Mean Std. Dev Min Max
CSP 343 71.65 13.15 20.65 92.21
Regulatory quality (S) 343 0.00 0.68 -1.78 0.86
Power distance index 343 52.11 16.07 31.00 100.00
Individualism 343 59.68 26.05 17.00 91.00
Masculinity 343 63.86 18.30 5.00 95.00
Uncertainty avoidance index 343 61.34 22.67 8.00 95.00
GDP ($trillion) 343 7423.83 7202.27 62.32 19485.39
Firm size (total assets in $million) 338 384.42 652.46 13.05 4006.24
ROA 336 5.03 5.13 -19.91 30.76
CEO Regulatory quality (S) 343 -0.00 0.56 -2.15 2.19
CEO Gender 343 0.04 0.20 0.00 1.00
CEO Education 343 0.24 0.43 0.00 1.00
22 the CEOs present in this sample are female. The last moderating variable CEO education shows us that 24% of the CEOs has an MBA
Moving to the correlation matrix (Table 3), one can observe that tegulatory quality, individualism and CEO education are positively correlated with a firm’s CSP suggesting that a firm has a higher CSP when operating in a society with higher values for regulatory quality and individualism. The positive correlation between CSP and CEO education suggests that a firm is likely to have a higher degree of CSP when its CEO has done an MBA program. Furthermore, CSP is negatively correlated with power distance index, suggesting that a firm operating in a society with a higher score on the power distance index, has a lower degree of CSP.
Other noteworthy correlations include the negative correlation between power distance index and regulatory quality and the positive correlation between individualism and regulatory quality. That is, these correlations suggest that a country’s regulatory quality increases when society scores higher on individualism and this quality decreases when a society scores higher on the power distance index. Lastly the highly significant positive correlation between CEO regulatory quality and regulatory quality can be explained due to the fact CEO regulatory quality represents the outcome of the subtraction of the firm’s home country regulatory quality from the regulatory quality of the CEO’s home country. As mentioned before, both the variables regulatory quality and CEO regulatory quality are standardised to solve the initial case of multicollinearity.
4.2 Main results
Table 4 projects the results of the linear regression analysis as well as the interaction analysis. The latter is conducted to test if a moderation effect exists. Model 1 tests the influence of the
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
(1) CSP 1
(2) Regulatory quality (S) 0.143** 1
(3) GDP 0.051 0.041 1
(4) Power distance index -0.286*** -0.807*** -0.243*** 1
(5) Individualism 0.298*** 0.552*** 0.491*** -0.773*** 1
(6) Masculinity 0.025 0.065 0.103 0.086 0.082 1
(7) Uncertainty avoidance index 0.090 0.042 -0.448*** 0.103 -0.242*** 0.290*** 1
(8) Firm size 0.091 0.013 0.049 0.041 0.026 0.055 0.015 1
(9) ROA 0.080 0.116* 0.084 -0.146** 0.126* -0.044 -0.028 -0.337*** 1
(10) CEO regulatory quality (S) 0.146** 0.308*** -0.217*** 0.069 0.212*** -0.109* 0.223*** 0.036 -0.008 1
(11) CEO gender 0.076 0.007 0.002 0.082 0.127* 0.029 0.034 0.028 0.039 0.046 1
(12) CEO education 0.124* 0.092 0.113* 0.099 0.105 0.007 -0.123* 0.054 0.020 0.079 0.020 1
* p<0.05, ** p<0.01 *** p<0.001
23 control variables on the dependent variable excluding the independent variable. This model has an R² of 0,141 and shows a few significant results. That is, individualism (β=0.139, p<0.01) and uncertainty avoidance index (β=0.091, p<0.05) are shown to positively influence CSP. Model 2 tests the relation between regulatory quality and CSP with the control variables included. This model has an R² of 0,162 which indicates that regulatory quality increases the explanatory power of the previous regression model with 2,1%. Next to that, the inclusion of the variable regulatory quality decreases the significance of the positive relation between individualism and CSP Furthermore, the relation between power distance and CSP has been found negative and significant (β=-0.295, p<0.01). Lastly, regulatory quality is found to negatively and significantly influence a firm’s CSP (β=-5.082, p<0.01). This relation remains negative and significant throughout model 3 to 6 which leads to the rejection of hypothesis H1. Model 3 tests the moderation effect that CEO regulatory quality has on the relation between regulatory quality and a firm’s CSP and shows an R² of 0,179. This relation has been shown to be negative and significant (β=-5.916, p<0.05). This result shows that an interaction effect exists on the relation between the independent and dependent variable. In other words, the relation between regulatory quality and CSP is negatively influenced by the difference between the regulatory quality of the CEO’s country of origin and the regulatory quality of a company’s home country. In order to analyse this effect in more detail, a moderation analysis will be conducted in the next subsection.
Model 4 tests the possible moderation effect of CEO gender. This model has a R² of 0,163 and shows a negative non-significant result (β=-1.562, p>0.05). In other words, no moderation effect has been indicated, leading to the rejection of hypothesis H3.
The same conclusion can be made for hypothesis H4 as the test for a moderation effect in Model 5 shows a positive but non-significant result (β=-2.924, p>0.05). Furthermore, this model has a R² of 0,179.
Finally, all variables are incorporated in one model of which the results are shown in Model 6. This model has a R² of 0,193 and shows a negative significant result for both the independent variable (β=-7.248, p<0.01) and the interaction term of CEO regulatory quality (β=-5.448,
p<0.05). Furthermore, this model shows no significant results for the interaction effects of both
24 Variable Model 1 CSP Model 2 CSP Model 3 CSP Model 4 CSP Model 5 CSP Model 6 CSP Regulatory quality (S) -5.082** (1.761) -7.196** (2.179) -4.928** (1.786) -5.970** (1.851) -7.248** (2.938)
Power distance index -0.986
(0.074) -0.295** (0.100) -0.427** (0.115) -0.294** (0.100) -0.307** (0.100) -0.415** (0.115) Individualism 0.139** (0.050) 0.130* (0.050) 0.131* (0.051) 0.125* (0.050) 0.125* (0.050) 0.118* (0.052) Uncertainty avoidance index 0.091*
(0.036) 0.084* (0.036) 0.138** (0.043) 0.086* (0.036) 0.093* (0.036) 0.137** (0.043) Masculinity -0.010 (0.043) -0.008 (0.042) -0.023 (0.043) -0.009 (0.043) -0.012 (0.042) -0.027 (0.043) GDP -0.000 (0.000) -0.000 (0.000) -0.000 (0.000) -0.000 (0.000) -0.000 (0.000) -0.000 (0.000) ROA -0.265 (0.142) -0.250 (0.141) -0.246 (0.140) -0.250 (0.141) -0.236 (0.139) -0.232 (0.140) Firm size 0.001 (0.001) 0.001 (0.001) 0.002 (0.001) 0.002 (0.001) -0.002 (0.001) -0.002 (0.001)
CEO Regulatory quality (S) 0.388
(1.922)
0.989 (1.964) CEO Regulatory quality (S) x Regulatory
quality (S) -5.916* (2.383) -5.448* (2.388) CEO Gender 3.978 (8.453) 1.532 (3.433)
CEO Gender x Regulatory quality -1.562
(5.804) -1.612 (5.736) CEO Education -0.406 (3.839) 3.009 (1.592)
CEO Education x Regulatory quality 2.924
(2.535) 2.806 (2.565) R2 0.141 0.162 0.179 0.163 0.179 0.193 N 335 335 335 335 335 335 *p<0.05 **p<0.01
25
Moderation analysis
Since Model 3 and Model 6 show a significant moderating effect of CEO regulatory quality on the relation between regulatory quality and CSP, a simple slope test has been conducted to identify the direction of the moderating effect. This has been done by computing the value of regulatory quality on three different levels of CEO regulatory quality. These levels are the mean of CEO regulatory quality, one standard deviation below and one standard deviation above the mean. The results are shown in table 5 and Figure 1. These outcomes show that CEO regulatory quality negatively and significantly influences the relation between regulatory quality and CSP for the medium (β=-6.629, p<0.01) and higher values of CEO regulatory quality (β=-9.666,
p<0.01). This indicates that CEOs who are born in countries with a similar or higher regulatory
quality than the regulatory quality of their firm’s home country, strengthen the negative relation between regulatory quality and the firm’s CSP. These findings are not in line with hypothesis H2a. Hence, H2a will be rejected. The moderation analysis also shows a negative and non-significant result for the lower levels of CEO regulatory quality, which is enough evidence to reject hypothesis H2b as well. In summary, the analysis suggests that the negative relation between regulatory quality and CSP is increasingly strengthened when the values of CEO regulatory quality increase. However, this trend is shown to be non-significant for the lowest values of CEO regulatory quality.
Table 5 - Conditional Effects of Regulatory quality on CSP
p 95% CI
Low levels of CEO RQ -3.592 0.142 -8.388 1.205 Medium levels of CEO RQ -6.629** 0.005 -11.193 -2.064 High levels of CEO RQ -9.666** 0.001 -15.357 -3.974 *p < .05 **p<0.01
Note: CEO RQ = CEO regulatory quality
26
5. CONCLUSION
The primary objective of this research was to determine the effect regulatory quality had on CSP and how this relation was affected by a CEO’s gender, nationality, and education. This section discusses the results and managerial and theoretical implications of this study. Lastly, the limitations of said research will be pointed out as well as some recommendations for future research.
Discussion of results
Firstly, hypothesis H1 proposed that higher regulatory quality has a positive effect on a firm’s CSP. The previous analysis has shown that although a significant relation has been identified, it was a negative one. This indicates that, contrary to the assumption of hypothesis H1, a higher degree of regulatory quality relates negatively to a firm’s CSP. This finding is somewhat counter-intuitive, but in line with the findings of Hartmann & Uhlenbruck (2015). However, as mentioned earlier, Hall & Soskice (2011) gave a possible explanation for these results as they found that higher governmental involvement may negatively affect a firm’s creativity and innovation.
27 Thirdly, hypothesis H3 proposed a positive moderating effect of CEO gender on the relation between regulatory quality and the firm’s CSP. However, the results showed a non-significant effect for this variable as well. Therefore, hypothesis H3 has been rejected. This outcome shows that although CEO gender has been found to directly affect a firm’s level of CSP (Idowu, 2018), it is unlikely to moderate the effect that regulatory quality has on a firm’s CSP. The first explanation for the absence of a moderating effect of CEO gender is the fact that the sample incorporates a very small amount (4%) of female CEO’s. Therefore, a possible effect may be overlooked. This is in line with the possible explanation given by Manner (2010) where he states that there are a limited number of female CEOs.
Lastly, hypothesis H4 proposed that the possession of an MBA degree made a CEO strengthen the relationship between regulatory quality and a firm’s CSP. However, although the analysis showed a positive result, it has been found to be non-significant, leading me to reject hypothesis H4. This outcome shows that it is unlikely that the CEO’s educational background has a moderating effect on the relationship between regulatory quality and a firm’s CSP. This may be explained by the findings of Rasche, Glibert & Schedel (2013) regarding the ongoing trend of the inclusion of ethics in MBA programs (Moon & Orlitzky, 2011). That is, although this trend has increased the inclusion of ethics among the curricula of MBA programs, the courses incorporating ethics are and have been often electives (Rasche et al., 2013). This means that it is likely that just a part of the CEO’s has taken these courses, leading to some CEO’s being highly aware of CSR related laws and regulations and some that are not. Therefore, the ethical awareness of CEO’s within this sample might be too fragmented to produce a significant result.
In general, these results indicate that only CEO nationality moderates the relation between regulatory quality and CSP. However, the possibility exists that other CEO demographics do have a moderating impact on the relation between institutional forces and a firm’s CSP when the institutional environment is studied as a whole.
Managerial and theoretical implications
28 Next to that, this thesis further widens the literature on institutional pressures and related organisational behaviour. It namely showed the negative effect that regulations and laws have in pressuring firms’ their behaviour. This counter-intuitive finding extends literature as it shows that strict laws and regulations are likely to backfire, confirming the findings of previous literature (Hartmann & Uhlenbruck, 2015). Furthermore, this paper contributes to upper echelon theory as it identifies CEO nationality as a characteristic of importance in the discussion regarding a firm’s CSP. Finally, this thesis shows that CEO’s may moderate the relation between certain aspects of the institutional environment and CSP.
From the managerial point of view, this thesis contributes to their practices by showing the importance of the formal institutional environment and a CEO’s nationality. This thesis shows that firms seeking to increase their CSP may want to move to an environment with less regulatory quality. Next to that the firm should appoint a CEO that origins from a country with a similar or lower regulatory quality. Therefore, this paper emphasises the need to take a CEO’s nationality and firm’s the national environment into account while strategy is implemented and executed.
Limitations and future research
Even though this study offers various important implications for both theory and managerial practices, a few limitations have to be taken into account while interpreting the results. For example, the sample shows that 31.08% of the companies is based in the US and 97.92% of the CEO’s are identified as males. Considering that the remaining 68.84% of the companies is spread across the world, one can argue that the sample is US- and male-biased. Especially the latter imposes severe implications for the findings in this study related to the effect of the CEO’s gender. Therefore, future research should focus on a more equally distributed sample in terms of firm nationality and CEO gender.
30
6. REFERENCES
Aguilera, R., Rupp, D., Williams, C., &Ganapathi, J. (2007). Putting the s back in corpo- rate social
responsibility: A multilevel theory of social change in organizations. Academy of Management Review, 32(3), 836–863.
Aguilera-Caracuel J, Hurtado-Torres N.E., Aragón-Correa J.A., Rugman A.M. (2013). Differentiated effects of formal and informal institutional distance between countries on the environmental performance of multinational enterprises. Journal ofBusiness Research 66(2): 2657–2665, DOI:
10.1016/j.jbusres.2013.04.002
Aguinis, H., & Glavas, A. (2012). What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda. Journal of Management, 38(4), 932–968.
https://doi.org/10.1177/0149206311436079
Aguinis, H. (2011). Organizational responsibility: Doing good and doing well. In S. Zedeck (Ed.), APA handbook of industrial and organizational psychology vol.3, 855-879. Washington, DC: American Psychological Association.
Arce, M. D. G (2004) ‘Conspicuous By Its Absence: Ethics and Managerial Economics’, Journal of Business Ethics 54, 261–277.
Albareda, L., Lozano, J. M., & Ysa, T. (2007). Public Policies on Corporate Social Responsibility: The Role of Governments in. Source: Journal of Business Ethics, 74(4), 391–407. https://doi.org/10.1007/sl0551-007-9514-l
Bajo, E., Bigelli, M., Hillier, D., & Petracci, B. (2009). The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy. Journal of Business Ethics, 90(3), 331.
https://doi.org/10.1007/s10551-009-0044-x
Barnett, M. (2007) ‘Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility’. Academy of Management Review 32(3), 794–816
Barrena Martínez, J., López Fernández, M., Miguel, P., & Fernández, R. (2016). Corporate social responsibility: Evolution through institutional and stakeholder perspectives. European Journal of Management and Business Economics, 25, 8–14. https://doi.org/10.1016/j.redee.2015.11.002
Bernardi, R., D. F. Bean and K. M. Weippert (2002), ‘Signaling Gender Diversity Through Annual Report Pictures: A Research Note on Image Management’, Accounting Auditing & Accountability Journal 15(4), 609– 616
Berrone, P., Fosfuri, A., Gelabert, L., & Gomez-Mejia, L. R. (2013). Necessity as the mother of 'green' inventions: Institutional pressures and environmental innovations. Strategic Management Journal Strat. Mgmt. J, 34, 891–909. https://doi.org/10.1002/smj.2041
Berry, H., Guillén, M. F., & Zhou, N. (2010). An institutional approach to cross-national distance. Journal of International Business Studies, 41(9), 1460–1480. https://doi.org/10.1057/jibs.2010.28
Bies, R. J., Bartunek, J. M., Fort, T. L., & Zald, M. N. (2007). Corporations as social change agents: Individual, interpersonal, institutional, and environmental dynamics. Academy of Management Review, 32(3): 788– 793
Boulouta, I., & Pitelis, C. N. (2014). Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of Business Ethics, 119(3), 349–364
Bowen, H. R. (1953). Social responsibilities of the businessman. New York: Harper & Row.
Bowerman, B. L., & O'connell, R. T. (1990). Linear statistical models: An applied approach. Brooks/Cole. Busenbark, J. R., Krause, R., Boivie, S., & Graffin, S. D. (2016). Toward a Configurational Perspective on the
CEO. Journal of Management, 42(1), 234–268. https://doi.org/10.1177/0149206315618448
31
Campbell, J.L., (2007). Why would corporations behave in socially responsible ways? an institutional theory of corporate social responsibility. Acadadamy of Management Review 32, 946-967
Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper Echelons Research Revisited: Antecedents, Elements, and Consequences of Top Management Team Composition. Journal of Management, 30(6), 749–778. https://doi.org/10.1016/j.jm.2004.06.001
Carroll, A. B. (1979). A three-dimensional conceptual model of corporate social performance. Academy of Management Review, 4(4), 497–505.
Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48
Carroll, A.,&Shabana, K. (2010). Thebusiness case for corporate social responsibility: A review ofconcepts, research and practice. International Journal of Management Reviews, 12(1), 85–105
Chan JC, Welford R. (2005). Assessing corporate environmental risk in China: An evaluation of reporting activities of Hong Kong listed enterprises. Corporate Social Responsibility and Environmental Management 12(2): 88–104, DOI: 10.1002/csr.088
Christensen, L. J., Peirce, E., Hartman, L. P., Hoffman, W. M., & Carrier, J. (2007). Ethics, CSR, and Sustainability Education in the Financial Times Top 50 Global Business Schools: Baseline Data and Future Research Directions. Journal of Business Ethics, 73, 347–368. https://doi.org/10.1007/s10551-006-9211-5
Comisión Europea. (2011). Estrategia renovada de la UE para 2011–2014 sobre la responsabilidad social de las empresas. Bruselas, 25 de Octubre.
CONE (2017) 2017 Cone Communications CSR Study accessed on June 10, 2019 http://www.conecomm.com/research-blog/2017-csr-study
Cowen, S., Ferreri, L.B. & Parker, L.D. (1987), “The impact of corporate characteristics on social responsibility disclosure: a typology and frequency-based analysis”, Accounting, Organisations and Society, 12(2), 111-122.
Dasgupta S, Hettige H, Wheeler D. (2000). What improves environmental performance? Evidence from Mexican industry. Journal of Environmental Economics and Management 39(1): 39–66, DOI: 10.1006
jeem.1999.1090
Dahlsrud, A. (2006). How corporate social responsibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Environmental Management, 15,1–13.
Daude, C., & Stein, E. (2007). The quality of institutions and foreign direct investment. Economics and Politics, 19(3), 317–344. https://doi.org/10.1111/j.1468-0343.2007.00318.
Delmas, M. A., & Toffel, M. W. (2012). Institutional Pressures and Organizational Characteristics: Implications for Environmental Strategy. The Oxford Handbook of Business and the Natural Environment.
https://doi.org/10.1093/oxfordhb/9780199584451.003.0013
Dimaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in. Source: American Sociological Review (Vol. 48). Retrieved from
https://www.jstor.org/stable/pdf/2095101.pdf?refreqid=excelsior%3A100d0bca3d04dd03ec70ea36b3a801 30
Eagly, A. H., Johannesen-Schmidt, M. C., & Van Engen, M. L. (2003). Transformational, transactional, and laissez-faire leadership styles: A meta-analysis comparing women and men. Psychological Bulletin, 129, 569.
Fetscherin, M., Shaomin, L., Alon, I., Lattemann, C., & Yeh, K. (2010). Corporate Social Responsibility in Emerging Markets - the Importance of the Governance Environment. Management International Review: Journal of International Business, 50(5): 635 - 654.
Fifka, M. S., & Pobizhan, M. (2014). An Institutional Approach to Corporate Social Responsibility in Russia. Journal of Cleaner Production, 82: 192-201.
32
execu tives, top management teams, and boards. Oxford, England: Oxford University Press
Frank, R., et al. (1993) ‘Does Studying Economics Inhibit Cooperation’, The Journal of Economic Perspectives 7(2), 159–171.
Friedrich, R. J. (1982). In defense of multiplicative terms in multiple regression equations. American Journal of Political Science, 26, 797–833.
Gardberg, N. A., & Fombrun, C. J. (2006). Corporate citizenship: Intangible assets across institutional environments. Academy of Management Review, 31(2): 329–346
García-Meca, E., Uribe-Bohórquez, M.-V., & Cuadrado-Ballesteros, B. (2018). Culture, Board Composition and Corporate Social Reporting in the Banking Sector. Administrative Sciences, 8(3), 41.
https://doi.org/10.3390/admsci8030041
Gill, S. (2010). Is gender inclusivity an answer to ethical issues in business? An Indian stance. Gender in Management: an International Journal, 25 (1), 37-63.
Gjølberg, M. (2009). The origin of corporate social responsibility: global forces or national legacies? Socio-Economic Review, 7(4), 605–637. https://doi.org/10.1093/ser/mwp017
Godos-Díez, J.-L., Fernández-Gago, R., & Martínez-Campillo, A. (2011). How Important Are CEOs to CSR Practices? An Analysis of the Mediating Effect of the Perceived Role of Ethics and Social Responsibility. Journal of Business Ethics, 98, 531–548. https://doi.org/10.1007/s10551-010-0609-8
Gunningham, N. , Kagan, R. A. and Thornton, D. (2004), Social License and Environmental Protection: Why Businesses Go Beyond Compliance. Law & Social Inquiry, 29: 307-341. doi:
10.1111/j.1747-4469.2004.tb00338.x
Hackston, D., & Milne, M. J. (1996). Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing and Accountability Journal, 9(1), 77–108.
Halkos, G., & Skouloudis, A. (2016). Note from the field National CSR and institutional conditions: An exploratory study. Journal of Cleaner Production, 139, 1150–1156.
https://doi.org/10.1016/j.jclepro.2016.07.047
Halkos, G., & Skouloudis, A. (2017). Revisiting the relationship between corporate social responsibility and national culture. Management Decision, 55(3), 595–613. https://doi.org/10.1108/MD-12-2016-0868 Hall, P. A., & Soskice, D. (2001). An introduction to varieties of capitalism. In P. A. Hall & D. Soskice (Eds.),
Varieties of capitalism: The institutional foundations of comparative advantage (pp. 1–68). Oxford, MA: Oxford University Press
Harrel, F. (2001) Regression Modelling Strategies. New York: Springer-Verlag
Hartmann, J., & Uhlenbruck, K. (2015). National institutional antecedents to corporate environmental performance. Journal of World Business, 50, 729–741. https://doi.org/10.1016/j.jwb.2015.02.001 Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers.
Academy of Management Review, 9: 193–206
Haxhi, I., & van Ees, H. (2010). Explaining diversity in the worldwide diffusion of codes of good governance. Journal of International Business Studies, 41: 710–726.
Henriques I, Sadorsky P. (1996). The determinants of an environmentally responsive firm: An empirical approach. Journal of Environmental Economics and Management 30(3): 381–396, DOI:
10.1006/jeem.1996.0026
Ho, F., Wang, H.-M., & Vitell, S. (2012). A global analysis of corporate social perfor- mance: The effects of cultural and geographic environments. Journal of Business Ethics, 107: 423–433.
Hoffman AJ. 1999. Institutional evolution and change: environmentalism and the U.S. chemical industry. Academy of Management Journal 42(4): 351–371
33
Huang, S. K. (2013). The Impact of CEO Characteristics on Corporate Sustainable Development. Corporate Social Responsibility and Environmental Management, 20(4), 234–244. https://doi.org/10.1002/csr.1295 Husted, B. W. (2005). Culture and ecology: A cross-national study of the determinants of environmental
sustainability. MIR: Management International Review, 45(3), 349–371. Idowu, S. O. (2018). CSR, Sustainability, Ethics & Governance. Retrieved from
http://www.springer.com/series/11565
Ioannou, I., & Serafeim, G. (2012). What drives corporate social performance? The role of nation-level institutions. Journal of International Business Studies, 43: 834–864.
Jackson, G., & Apostolakou, A. (2010). Corporate Social Responsibility in Western Europe: An Institutional Mirror or Substitute? Journal of Business Ethics, 94, 371–394. https://doi.org/10.1007/s10551-009-0269-8 Johnson, R. A., & Greening, D. W. (1999). The Effects of Corporate Governance and Institutional Ownership
Types on Corporate. Source: The Academy of Management Journal (Vol. 42). Retrieved from https://www.jstor.org/stable/256977?seq=1&cid=pdf-reference#references_tab_contents
Kagan RA, Thornton D, Gunningham N. 2003. Explaining corporate environmental performance: How does regulation matters? Law & Society Review 37(1): 51–90, DOI: 10.1111/1540-5893.3701002
Kaur, R., & Singh, B. (2018). CEOs’ Characteristics and Firm Performance: A Study of Indian Firms. Indian Journal of Corporate Governance, 11(2), 185–200. https://doi.org/10.1177/0974686218806714 Keim, G. (2003). Nongovernmental organizations and business-government relations: The importance of
institutions. In J. P. Doh,&H. Teegen (Eds.), Globalization and NGOs: Transforming business, governments, and society. Westport, CT: Praeger.
Krüger, P. (2009). Corporate social responsibility and the board of directors. Working Paper (Job Market Paper). Toulouse School of Economics, Toulouse, 31 May 2010.
Kuznetsov, A., Kuznetsova, O., & Warren, R. (2009). CSR and the Legitimacy of Business in Transition Economies: the Case of Russia. Scandinavian Journal of Management, 25: 37-45.
Lewis, B. W., Walls, J. L., & Dowell, G. W. S. (2014). DIFFERENCE IN DEGREES: CEO
CHARACTERISTICS AND FIRM ENVIRONMENTAL DISCLOSURE. Strategic Management Journal Strat. Mgmt. J, 35, 712–722. https://doi.org/10.1002/smj.2127
Li, D., Cao, C., Zhang, L., Chen, X., Ren, S., & Zhao, Y. (2017). Effects of corporate environmental
responsibility on financial performance: The moderating role of government regulation and organizational slack. https://doi.org/10.1016/j.jclepro.2017.08.129
Louis, O., & Osemeke, N. (2017). The role of ethnic directors in corporate social responsibility: Does culture matter? The cultural trait theory perspectives. International Journal of Disclosure and Governance, 14(2), 152–172.
Lyon, T. P., & Maxwell, J. W. (2008). Corporate Social Responsibility and the Environment: A Theoretical Perspective. Review of Environmental Economics and Policy, 2(2), 240–260.
https://doi.org/10.1093/reep/ren004
Manner, M. H. (2010). The Impact of CEO Characteristics on Corporate Social Performance. Journal of Business Ethics, 93, 53–72. https://doi.org/10.1007/s10551-010-0626-7
Marquis, C., Glynn, M. A., & Davis, G. F. 2007. Community isomorphism and corporate social action. Academy of Management Review, 32(3): 925–945.
Marz, J. W., Powers T. L., & Queisser, T. (2003). Corporate and Individual Influences on Managers’ Social Orientation. Journal of Business Ethics, 46, 1–11.
Masulis, R. W., Wang, C., & Xie, F. (2012). Globalizing the boardroom—The effects of foreign directors on corporate governance and firm performance. Journal of Accounting and Economics, 53(3), 527–554. Retrieved from https://doi.org/10.1016/ j.jacceco.2011.12.003
34
33). Retrieved from https://about.jstor.org/terms
Matthiesen, M.-L., & Salzmann, A. J. (n.d.). Cross Cultural & Strategic Management Corporate social responsibility and firms’ cost of equity: how does culture matter? Article information.
https://doi.org/10.1108/CCSM-11-2015-0169
Mazutis, D. D. (2013). The CEO Effect: A Longitudinal, Multilevel Analysis of the Relationship Between Executive Orientation and Corporate Social Strategy. Business & Society, 52(4), 631–648.
https://doi.org/10.1177/0007650313490510
Miska, C., Szőcs, I., & Schiffinger, M. (2018). Culture’s effects on corporate sustainability practices: A multi-domain and multi-level view A R T I C L E I N F O. Journal of World Business, 53, 263–279.
https://doi.org/10.1016/j.jwb.2017.12.001
Mizruchi, M. S. (1983). Who controls whom? An examination of the relation between management and boards of directors in large American corporations. The Academy of Management Review, 8(3), 426. Retrieved from https://doi.org/10.2307/257831
Moon, J., & Orlitzky, M. (2011). Corporate social responsibility and sustainability education: A trans-Atlantic comparison. Journal of Management & Organization, 17(5), 583–603.
https://doi.org/10.1017/S1833367200001279
Myung, J. K., Choi, Y. H., Kim, J. D., Myung, J. K., Choi, Y. H., & Kim, J. D. (2017). Effects of CEOs’ Negative Traits on Corporate Social Responsibility. Sustainability, 9(4), 543.
https://doi.org/10.3390/su9040543
Nakamura, M., Takahashi, T., Vertinsky, I., (2001). Why Japanese firms choose to certify: a study of managerial responses to environmental issues. Journal of Environmental Economics and Management 42 (1), 23–52. Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate Social and Financial Performance: A
Meta-analysis. Retrieved from www.sagepublications.com
Ortiz-de-Mandojana, N., Aguilera-Caracuel, J., & Morales-Raya, M. (2016). Corporate Governance and Environmental Sustainability: The Moderating Role of the National Institutional Context. Corporate Social Responsibility and Environmental Management, 23(3), 150–164. https://doi.org/10.1002/csr.1367 Panwar. (2010). Students’ perceptions regarding CSR success of the US forest products industry, Social
Responsibility Journal, 6 (1), pp. 18-32.
Peterson, S. J., Galvin, B. M., & Lange, D. (2012). CEO SERVANT LEADERSHIP: EXPLORING EXECUTIVE CHARACTERISTICS AND FIRM PERFORMANCE. PERSONNEL PSYCHOLOGY (Vol. 65). Retrieved from https://onlinelibrary-wiley-com.proxy-ub.rug.nl/doi/pdf/10.1111/j.1744-6570.2012.01253.x Post, C., N. Rahman and E. Rubow (2011) ‘Diversity in the Composition of Board of Directors and Environ-
mental Corporate Social Responsibility (ECSR)’, Business & Society 49 (forthcoming).
Rao, K., & Tilt, C. (2016). Board Composition and Corporate Social Responsibility: The Role of Diversity, Gender, Strategy and Decision Making. Journal of Business Ethics, 138(2), 327–347.
https://doi.org/10.1007/s10551-015-2613-5
Rasche, A., Gilbert, D. U., & Schedel, I. (2013). Cross-Disciplinary Ethics Education in MBA Programs: Rhetoric or Reality? Academy of Management Learning & Education, 12(1), 71–85.
https://doi.org/10.5465/amle.2011.0016a
Roth, K. (1995). Managing international interdependence: CEO characteristics in a resource-based framework. Academy of Management Journal, 38(1), 200–231. Retrieved from https://doi.org/10.2307/256733 Sarkar R. (2008). Public policy and corporate environmental behaviour: A broader view. Corporate Social
Responsibility and Environmental Management 15: 281–297, DOI: 10.1002/csr.167
Sarkar, S., & Searcy, C. (2016). Zeitgeist or chameleon? A quantitative analysis of CSR definitions. Journal of Cleaner Production, 135, 1423–1435
