Although high-performance human resource practices do not directly affect corporate social performance strengths, they do positively affect CSP strengths in companies that are highly innovative or have high levels of slack. High-performance human resource management practices also directly and negatively affect CSP concerns. Drawing on the resource-based view and using secondary data from an objective, third-party database, the authors develop and test hypotheses about how high-performance HRM affects a company’s CSP strengths and concerns. Findings suggest that HRM and innovation are (...) important capabilities because they create and enhance other capabilities. (shrink)

Multinational enterprises are often accused of taking advantage of lax environmental regulations in developing countries. However, no quantitative analysis of the impact of doing business in nations of different income levels on environmental corporate social responsibility has been done prior to this study. Incorporating institutional factors in our approach, we argue that endoisomorphic and exoisomorphic pressures relating to ECSR impact MNEs differently according to the MNEs' level of activity in low-, lower-middle-, upper-middle-, and high-income nations. We predict and, using data (...) from 113 companies, find that selling in poorer nations is positively associated with increased levels of ECSR. Our research suggests that MNEs may not be participating in a “race to the bottom” but may instead be responding to global institutional pressure by exceeding local norms for environmental stewardship. Alternative interpretations of our findings are discussed. (shrink)

Primary stakeholder pressure has long been considered the main reason that firms engage in responsible behaviors. However, prior studies are generally silent on how industry characteristics reshape the relationships among stakeholders. By integrating information asymmetry in credence goods industries with the stakeholder power framework, we posit that the extent to which consumers can evaluate the qualities of goods alters the dynamics between a firm and its two primary stakeholders, regulators and consumers. Longitudinal data collected on 72 pharmaceutical companies indicate that (...) consumers of pharmaceutical products can only influence firms indirectly through the regulator. Further, contrary to the conventional wisdom that innovative firms are more capable of resisting stakeholder pressure, we find that R&D investment increases the dependency of pharmaceutical firms on the regulator. Lastly, we do not find that lobbying reduces dependency on the regulator except for high R&D firms. These findings provide important theoretical, ethical, and policy implications. (shrink)