Complementary or Substitutive Effects? Corporate Governance Mechanisms and Corporate Social Responsibility

By Won‐yong Oh, Young Kyun Chang, Tae-Yeol Kim. 2018

198 citations recorded by the source corpus.

Management researchers have investigated how corporate governance mechanisms influence corporate social responsibility (CSR). The previous literature has been largely based on agency theory, which emphasizes the roles of effective monitoring and incentive alignment, but the empirical evidence has been mixed. This inconsistency may result from the assumption that each governance mechanism functions independently, even though they interact with one another to affect CSR. On the basis of a perspective of bundle of governance mechanisms, we examined whether multiple governance mechanisms act as complements or substitutes for each other in promoting CSR. Using a panel sample of U.S. firms for the years 2004 to 2010, we found that multiple governance mechanisms mainly act as substitutes to promote CSR. Our findings suggest that a similar level of CSR can be achieved with different combinations of governance mechanisms. Our study contributes to the fields of both corporate governance and CSR in theory and practice.

Subfields: Accounting, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f7d585c7d10e5f4a4052e30126f53b568e16312b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Zam Zuriyati Mohamad
2. Nooraisah Katmon
3. Nadia Smaili
4. Camélia Radu
5. O. Farooque
6. N. M. Norwani

In Marketing

1. Zam Zuriyati Mohamad
2. Nooraisah Katmon
3. Nadia Smaili
4. Camélia Radu
5. O. Farooque
6. N. M. Norwani

In Strategy and Management

1. Zam Zuriyati Mohamad
2. Nooraisah Katmon
3. Nadia Smaili
4. Camélia Radu
5. O. Farooque
6. N. M. Norwani

Citations in the corpus

• Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market (2017, background): “Following Oh et al. (2016), we consider that there is a ‘‘comple-mentary relationship’’ between respected diversity variables on CSR when the interaction term shows a significant positive association, while a ‘‘substitutive relationship’’ in the case the interaction term shows a significant negative…”
• Alignment Versus Monitoring: An Examination of the Effect of the CSR Committee and CSR-Linked Executive Compensation on CSR Performance (2021, background): “Consideration of corporate governance mechanisms as part of a system implies that these mechanisms can complement or substitute for one another (Oh et al., 2018; Rediker & Seth, 1995).”