Buffering or Aggravating Effect? Examining the Effects of Prior Corporate Social Responsibility on Corporate Social Irresponsibility

Zhe Zhang (), Mijia Gong (), Shanshan Zhang () and Ming Jia ()
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Zhe Zhang: Xi’an Jiaotong University
Mijia Gong: Xi’an Jiaotong University
Shanshan Zhang: Xi’an Jiaotong University
Ming Jia: Northwestern Polytechnical University

Journal of Business Ethics, 2023, vol. 183, issue 1, No 8, 147-163

Abstract: Abstract Prior studies on stakeholders’ responses to firms with high prior corporate social responsibility (CSR) engaging in corporate social irresponsibility (CSIR) show inconsistent results. To explore this inconsistency, we focus on the intentionality of CSIR and draw upon cognitive dissonance theory to examine how transgressional CSIR and accidental CSIR differently influence investors’ responses to firms with high prior CSR through both emotional (e.g., anger) and cognitive (e.g., moral judgment) processes. An experimental study using a facial expression analysis technology— FaceReader 5.0 (Study 1) and a scenario experiment (Study 2), reveal that high prior CSR is a double-edged sword. Specifically, high prior CSR elicits an aggravating effect on investor responses (more anger, more negative moral judgment, and more negative effects on investment) in light of transgressional CSIR, but it has a buffering effect on investor responses (less anger, less negative moral judgment, and less negative effects on investment) in light of accidental CSIR. Moreover, we find that when prior CSR and CSIR are in the same (vs. different) domain, the aggravating effect of transgressional CSIR is strengthened, but the buffering effect of accidental CSIR is weakened. Our findings provide important theoretical and practical insights into the effect of prior CSR on investor responses in cases of different CSIR.

Keywords: Corporate social responsibility; Corporate social irresponsibility; Anger; Moral judgment; Investment decision (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10551-022-05036-x

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