Do firms walk the talk when economic uncertainty is high?

Muhammad Azeem Qureshi, Ammar Gull (), Tanveer Ahsan and Muhammad Ansar Majeed
Additional contact information
Tanveer Ahsan: ESC [Rennes] - ESC Rennes School of Business
Muhammad Ansar Majeed: Zhejiang University [Hangzhou, China]

Post-Print from HAL

Abstract: The growing influence of stakeholders and unprecedented emphasis on corporate social responsibility (CSR) have significantly changed the way firms operate. To seek legitimacy from stakeholders, firms might implement CSR measures in true essence while others might turn to CSR decoupling (i.e., higher CSR disclosure than performance), which is detrimental to the firm and stakeholders, specifically when facing high economic uncertainty. Using a large dataset of U.S. firms listed between 2002 and 2019, we examine how economic policy uncertainty (EPU) impacts CSR decoupling. Our findings show that EPU and CSR decoupling are positively and significantly associated, suggesting that firms do not walk the talk when economic uncertainty is high. These results expand legitimacy theory by suggesting that corporations use CSR disclosure as a façade to seek legitimacy from stakeholders when faced with high uncertainty. Interestingly, female directors, who are associated with higher ethicality, acquit themselves well when uncertainty is high: gender-diverse boards play a significant role in moderating policy uncertainty's adverse impacts on CSR decoupling. These findings are robust to different regression models, subsample analysis, and endogeneity issues.

Date: 2024-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Cleaner Production, 2024, pp.140617. ⟨10.1016/j.jclepro.2024.140617⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-04403762

DOI: 10.1016/j.jclepro.2024.140617

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().