The Moderating Effect of Cultural Values on the Relationship Between Corporate Social Performance and Firm Performance

Wei Shi () and Kevin Veenstra ()
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Wei Shi: University of Miami
Kevin Veenstra: McMaster University

Journal of Business Ethics, 2021, vol. 174, issue 1, No 5, 89-107

Abstract: Abstract Using two national culture dimensions, we show that the influence of firms’ corporate social performance (CSP) on corporate financial performance (CFP) hinges on culture. Specifically, CFP is higher in those firms where CSR initiatives are congruent with the cultural environment. CSP has a negative impact on CFP for those firms domiciled in countries which are individualistic and favor flexibility. These findings are amplified for those firms with low levels of foreign influence in terms of institutional ownership and sales. Using a dataset covering 5334 firms from 41 different countries, our results indicate that culture and CSR initiatives have a powerful interaction effect in determining CFP, suggesting that CSP’s impact is dependent upon the culture of the country where the firm resides.

Keywords: Cultural values; Corporate social performance; Firm performance (search for similar items in EconPapers)
JEL-codes: A13 D22 D63 M14 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (16)

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DOI: 10.1007/s10551-020-04555-9

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