Is corporate social responsibility a matter of trust? A cross-country investigation

Hui Zhu and Eva Wagner

International Review of Financial Analysis, 2024, vol. 93, issue C

Abstract: This study examines how social trust influences corporate social responsibility (CSR) across countries. We find a positive relationship between CSR engagement and societal trust. We also document the economic mechanisms explaining how trust affects CSR activities. Our findings are robust to alternative CSR measures, sub-sample analyses, and country-level estimations. Furthermore, the results from difference-in-difference methods and an instrumental variables (IVs) approach imply that our findings are robust in accounting for endogeneity. Overall, our findings suggest that a higher level of trust reduces the likelihood of harmful misunderstandings while facilitating greater stakeholder cooperation, thereby increasing CSR activities.

Keywords: Corporate social responsibility; Trust; Stakeholder cooperation view (search for similar items in EconPapers)
JEL-codes: G30 G41 M14 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:93:y:2024:i:c:s1057521924000590

DOI: 10.1016/j.irfa.2024.103127

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