Indulgence versus Restraint: The Moderating Role of Cultural Differences on the Relationship between Corporate Social Performance and Corporate Financial Performance. Issue 2 (15th March 2019)

• Record Type: Journal Article
• Authors: Sun, Jieqiong; Yoo, Shijin; Park, Jimi; Hayati, Babak
• Is Part Of: Journal of global marketing. Volume 32:Issue 2(2019)
• Page Start: 83
• Page End: 92
• Publication Date: 2019-03-15
• Subjects: Corporate financial performance -- corporate social performance -- corporate social responsibility -- culture -- indulgent versus constraint culture; Export marketing -- Periodicals; Marketing -- Periodicals; 658.84
• DOI: 10.1080/08911762.2018.1464236
• Languages: English
• ISSNs: 0891-1762

Abstract

ABSTRACT: Adapting to the cultural environment surrounding, a firm is of paramount importance in international marketing practices. Extant marketing literature provides meager guidance to marketers on how to adapt to cultural factors to turn corporate social responsibility strategies into financial outcomes. To address this gap, we utilize the instrumental stakeholder theory and Hofstede's cultural framework to investigate the moderating effect of indulgence versus restraint culture on the relationship between corporate social performance (CSP) and corporate financial performance (CFP). Applying a panel data regression analysis to a dataset of CSP and CFP data for 3753 firms from 43 different countries, we demonstrate that CSP has a positive effect on CFP. However, we show that CSP has a weaker effect on CFP in firms located in indulgent countries. Therefore, to generate financial outcomes, we recommend managers to allocate more resources to CSP initiatives if the firm is operating in a culturally restrained country.