Effects of Foreign Directors’ Nationalities and Director Types on Corporate Philanthropic Behavior: Evidence from Korean Firms

Yeong Seon Kang, Eunji Huh and Mi-Hee Lim
Additional contact information
Yeong Seon Kang: Department of Business Administration, University of Seoul, 163 Seoulsiripdae-ro, Dongdaemun-gu, Seoul 02504, Korea
Eunji Huh: College of Business, Korea Advanced Institute of Science and Technology, 85 Hoegi-ro, Dongdaemun-gu, Seoul 02455, Korea
Mi-Hee Lim: Department of International Business and Trade, Myongji University, 34 Geobukgol-ro, Seodaemun-gu, Seoul 03674, Korea

Sustainability, 2019, vol. 11, issue 11, 1-18

Abstract: Addressing the fact that there are few studies exploring the relationship between board characteristics and corporate social responsibility (CSR) in non-Western contexts, this study examines the relationship in South Korean corporate contexts. We concentrate on foreign directors as a board attribute, which is reported as a remarkable change in Korean corporate boards, and propose that foreign directors have different impacts on CSR investment depending on their nationality (Anglo-Americans vs. non-Anglo-Americans) and director types (insiders vs. outsiders). In detail, the presence of directors from Anglo-American countries (e.g., the United States, the United Kingdom) decreases firms’ CSR involvement, whereas the presence of directors from non-Anglo-American countries (e.g., France, Germany) increases firms’ CSR involvement. Moreover, the effects of Anglo-Americans on CSR are strengthened when they are inside (rather than outside) directors. Empirical analyses using a sample of 1828 Korean firms from 2002 to 2015 provide evidence to support the predictions. This study theoretically contributes to CSR and corporate governance literature in that it sheds light on the CSR in non-Western companies and reveals varied effects of foreign directors contingent upon their individual attributes. It also has practical implications for policymakers and corporate managers by providing insights of the changes generated by foreign members in a boardroom.

Keywords: board of directors; director nationality; director types; corporate philanthropy; South Korea (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/11/3132/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/11/3132/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:11:p:3132-:d:236902

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().