Abagail McWilliams

Corporate social responsibility and financial performance: correlation or misspecification?

Researchers have reported a positive, negative, and neutral impact of corporate social responsibility (CSR) on financial performance. This inconsistency may be due to flawed empirical analysis. In this paper, we demonstrate a particular flaw in existing econometric studies of the relationship between social and financial performance. These studies estimate the effect of CSR by regressing firm performance on corporate social performance, and several control variables. This model is misspecified because it does not control for investment in R&D, which has been shown to be an important determinant of firm performance. This misspecification results in upwardly biased estimates of the financial impact of CSR. When the model is properly specified, we find that CSR has a neutral impact on financial performance. Copyright

Corporate Social Responsibility: Strategic Implications

We describe a variety of perspectives on corporate social responsibility (CSR), which we use to develop a framework for consideration of the strategic implications of CSR. Based on this framework, we propose an agenda for additional theoretical and empirical research on CSR. We then review the papers in this special issue and relate them to the proposed agenda.

Creating and Capturing Value: Strategic Corporate Social Responsibility, Resource-Based Theory, and Sustainable Competitive Advantage

The authors analyze the creation and capture of private and social value by firms that adopt corporate social responsibility (CSR) strategies. Strategic CSR is defined as any “responsible” activity that allows a firm to achieve a sustainable competitive advantage, regardless of motive. To provide a roadmap for managers to accomplish this objective, the authors integrate the resource-based theory (RBT) framework with concepts and tools from economics, such as hedonic pricing, contingent valuation, and the new literature on the economics of industrial organization, where CSR is referred to as “the private provision of public goods.” By linking CSR, RBT, economic models of private provision of public goods, and pricing models, the authors demonstrate how RBT can provide a structure for determining the strategic value of CSR. They then discuss the conditions under which CSR can contribute to sustainable competitive advantage.

A Theoretical and Empirical Analysis of Journal Rankings: The Case of Formal Lists

This study examines the use of formal rankings of journals by management departments for personnel decision purposes. We posit that the probability of adopting a list of formal rankings is related to a set of characteristics of the department. Few schools have formal lists of journals. Our empirical findings imply that the probability of adopting a list is positively correlated with department size and is inversely correlated with the perceived quality of the department. Considerable variation exists across such lists and across different institutions in the perceptions of the quality of journals. This suggests that, although lists may reduce the level of uncertainty regarding the assessment of research quality by providing explicit targets, lists may also induce faculty members to develop institution-specific human capital. This could reduce faculty mobility and impede career development.

The Returns to Mobility and Job Search by Gender

Using data from the National Longitudinal Survey of Youth, the authors estimate the returns to job search, mobility, and the interaction of search and mobility for young men and women. They find statistically significant gender differences in mobility patterns and search behavior, but not in the returns to a given behavior. Both men and women engaged in substantial job search and mobility early in their careers, which resulted in wage growth premiums. There is evidence of an interactive effect: returns to search were realized through mobility, and returns to mobility were augmented by search.

Issues in the Use of the Event Study Methodology: A Critical Analysis of Corporate Social Responsibility Studies:

Organizational researchers are increasingly using the event study methodology to assess the effect of strategic decisions on firm performance. Unfortunately, event studies alone are inadequate because, at best, they provide estimates of the shortrun impact on shareholders only and not on other corporate stakeholders. Furthermore, event study findings are sensitive to even small changes in research design. The authors illustrate the lack of robustness by examining five recent studies of corporate social responsibility (CSR) that report conflicting results. They conclude that these contradictory findings arise from significant differences in research design and implementation. The authors also demonstrate why it is inappropriate to draw conclusions regarding the managerial implications of CSR activities from these studies. Finally, they identify alternative methodologies that organizational researchers could use to supplement the event study approach to assess the overall impact of CSR on stakeholders.

The Wage Effects of Cumulative Job Mobility

This analysis of data from the National Longitudinal Survey of Youth shows that cumulative job mobility had statistically significant effects on wages in the years 1979–88. The direction of the wage effects (positive or negative) and their magnitude varied depending on the type of cumulative mobility examined: employee-initiated versus employer-initiated separations, economic versus family-related quits, layoffs versus discharges. The results also indicate that although men and women had different mobility histories—men, for example, had been discharged more often than women, and women had quit for family-related reasons more often than men—the wage effects of each type of cumulative mobility (economic quits, family-related quits, layoffs, and discharges) were similar for men and women.

The Balance of Trade Between Disciplines Do We Effectively Manage Knowledge

This study was motivated by the admonition of Professor Hambrick, as president of the Academy of Management, that the field does not “matter” much. One reason for this may be that management scholars have not done a good job of disseminating knowledge to scholars in related fields. The article examines this proposition by assessing the citation patterns between management journals and journals in the related social sciences (citations received and citations sent). Results indicate that management continues to run a significant balance-of-trade deficit with economics, psychology, and sociology. Management exports a significant (but small) amount of knowledge only to psychology, while importing a significant amount from economics, psychology, and sociology. Results indicate that there is much work to be done to improve our management of knowledge, relative to the social sciences.

Corporate Social Responsibility: International Perspectives

In this introduction to the special issue, we provide a brief review of the CSR literature with attention to some of the difficulties in globalizing the existing CSR concepts. Following this we provide a brief summary of each of the four papers that comprise the special issue, with emphasis on the unique contribution of each.

Scholarly journals as producers of knowledge: Theory and empirical evidence based on data envelopment analysis

There have been numerous studies that rank journals based on relative quality. These have generally failed to address some important theoretical and empirical issues relating to productivity. As an alternative, the authors outline a theoretical framework in which an academic journal is considered to be a “producer” of intellectual output. Using the field of management as an example, the authors specify the inputs and outputs of the production process and estimate the relative efficiency of journals using Data Envelopment Analysis. The derived measures of relative productivity are then used to develop a productivity ranking of journals. To explain why some journals use inputs more efficiently than others, the authors regress the estimates of relative efficiency on a set of managerial factors and suggest means to increase relative efficiency. The authors find that increasing the size of the editorial board and reducing both the subscription price and the acceptance rate will enhance the relative performance of an academic journal.