Corporate social performance: Inter-industry and international differences

The past decades have experienced a growing interest in social and environmental issues, which has put more pressure on companies to meet diverse stakeholder expectations. These expectations encompass both inter-industry and international differences, highlighting the context-dependence of corporate social performance (CSP). Given the increased pressure to conduct business in a socially responsible manner, managers and policy-makers must understand the institutional factors that affect CSP but are not directly controllable. Despite this need, empirical studies of institutional effects are relatively rare and have mostly concentrated on a limited number of countries or industries. Moreover, informal institutions such as postmaterialistic values have not been adequately considered in the context of institutional research, although postmaterialism represents social change resulting in new social demands, which then cause more intense pressure on companies to improve their CSP. Our study accounts for postmaterialism and examines the institutional effects on CSP at both the national and industry levels in a sample of 6211 companies from 52 countries. To conduct this study, we utilized CSP information from the CSRHub database, which allowed us to analyse overall CSP and its four dimensions: community, employees, environment and governance. Our findings based on linear regression analyses indicate that country-level institutions are most strongly associated with CSP, and that the level of economic development and postmaterialistic values are positively related with the overall CSP and most of its dimensions. Also, company size and financial performance appear to affect CSP, while the evidence for the effect of industry impact is weak. Overall, there are both similarities and significant differences in the drivers of overall CSP and its dimensions. Understanding the determinants of CSP can improve understanding of how companies can contribute to sustainable development across nations and industries via sustainable business models (SBMs). Thus, our results may highlight the roles played by national governments in stimulating sustainable development in general and alternative SBMs in particular.