In this paper we examine the effects of different competitive conditions on the determination and evaluation of strategies of corporatesocial responsibility (CSR). Although the mainstream of current thinking in business ethics recognizes that a firm should invest in social responsibility, the normative theory on how specific competitive conditions affect a firm’s social responsibility remains underdeveloped. Intensity of competition, risks to reputation and the regulatory environment determine the competitive conditions of a firm. Our central thesis is that differential strength of competition (...) produces differential moral legitimacy of firm behavior. When competition is fierce or weak, different acts or strategies become morally acceptable, as well as economically rational. A firm has to develop its own strategy of social responsibility, in light of its competitive position, as well as ethical considerations. (shrink)

This research examines the relationship between corporate social responsibility (CSR) and company stock valuation across three regions of the world. After a brief introduction, the article gives an overview of the evolving definition of CSR as well as a discussion of the ways in which this construct has been operationalized. Presentation of the potential impact of corporate social performance on firm financial performance follows, including investor characteristics, the rationale behind their choices, and their influence on the marketplace for securities worldwide. (...) The unique method used to select socially responsible investments is then provided that also includes a description of the quantitative techniques employed in the analyses. Results are offered subsequently, and the close describes implications for global enterprises as socially responsible investments. (shrink)

In this article we discuss whether it pays to invest ethically. Our aim is to examine corporate social responsibility from philosophical, moral and practical points of views. We focus on two main issues related to ethical investments. Firstly we discuss the moral dilemma of how capitalism has changed its shape in today's world and from 'blaming the business' there is a general attempt to use the markets to promote ethics values and corporate social responsibility. Secondly, we analyze the growth of (...) ethical investment funds in the UK today, and their performance, and highlight some of the institutional investors involved in the management of ethical funds. We discuss whether ethical investments really succeed in reducing the conflict between profit-making and social responsibility as they promise or whether they use commercial rhetoric and market mechanism to merely sell us our own perceived values back. We conclude that the paper has a key contribution in setting the scene for future research in an area that is evolving and of fundamental importance to companies, investors and various stakeholder groups. (shrink)

Researchers and practitioners have devoted considerable attention to firms'' policies regarding discretionary disclosures. Prior studies argue that firms increase demand for their debt and equity issues and, thus, lower their cost of capital, by providing more informative disclosures. However, empirical research has generally not been able to document significant benefits from increased disclosure.This paper proposes an alternative explanation – firms disclose because it is the socially responsible thing to do. We argue that companies have incentives to engage in stakeholder management (...) by undertaking socially responsible activities and that providing extensive and informative disclosures is one such practice.We examine the relationship between firms'' disclosures and measures of social responsibility. We use ratings provided by the Council on Economic Priorities as proxies for the degree of social responsibility adopted by the sample firms. Disclosure rankings provided by the annual Association for Investment Management and Research Corporate Information Committee Reports (AIMR Reports) are used to measure disclosure level.Our results indicate that there is a positive relationship between disclosure level and corporate social responsibility. That is, firms that engage in socially responsive activities provide more informative and/or extensive disclosures than do companies that are less focused on advancing social goals. In addition, we find that socially responsible firms are more likely to provide this increased disclosure through better investor relations practices. These results support our contention that increased disclosure is a form of socially responsible behavior. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" effect. (...) We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)