• 21 Mar 2014
  • Working Paper

Speaking of Corporate Social Responsibility

by Hao Liang, Christopher Marquis, Luc Renneboog & Sunny Li Sun

Executive Summary — While many scholars have observed that corporate social responsibility (CSR) is a deeply cultural process, there are inconsistent findings on the specific cultural mechanisms by which culture affects CSR. This paper suggests that the way in which corporations use language is a strong predictor of their CSR and sustainability practices. It addresses two questions: 1) Why do CSR practices vary significantly across countries? And 2) How does the future-time orientation of companies' working languages affect their adoption of, compliance to, and engagement in corporate social responsibility programs? Building on the future-time criterion of scholars Dahl (2000) and Chen (2013), which separates languages into two broad categories-those languages that require future events to be grammatically marked when making predictions, and those that do not-the authors examine thousands of global companies across 59 countries from 1999 to 2011. The empirical results support the hypothesis that languages that grammatically separate the current tense from the future tense can significantly affect how corporations perceive future-oriented strategies, and so make corporate behavior less future-oriented. Overall, the authors introduce a new way to think about underlying variation in global CSR practices. As they show in this paper, it is crucial to examine language as an important underlying feature that shapes cultural values and the norms in a society. The study also builds on research into the ways in which perceptual category systems focus the attention, and subsequently, the behaviors, of corporate leaders. Key concepts include:

  • Research in linguistics and economics has shown that one of the most important factors that shapes culture and creates variation across countries is spoken language.
  • This study contributes to understanding international variation of CSR.
  • Differences in cross-national commitment to CSR arise from characteristics of the languages spoken across the globe.

Author Abstract

We argue that the language spoken by corporate decision makers influences their firms' social responsibility and sustainability practices. Linguists suggest that obligatory future-time-reference (FTR) in a language reduces the psychological importance of the future. Prior research has shown that speakers of strong FTR languages (such as English, French, and Spanish) exhibit less future-oriented behavior (Chen, 2013). Yet, research has not established how this mechanism may affect the future-oriented activities of corporations. We theorize that companies with strong-FTR languages as their official/working language would have less of a future orientation and so perform worse in future-oriented activities such as corporate social responsibility (CSR) compared to those in weak-FTR language environments. Examining thousands of global companies across 59 countries from 1999 to 2011, we find support for our theory and further that the negative association between FTR and CSR performance is weaker for firms that have greater exposure to diverse global languages as a result of (a) being headquartered in countries with a higher degree of globalization, (b) having a higher degree of internationalization, and (c) having a CEO with more international experience. Our results suggest that language use by corporations is a key cultural variable that is a strong predictor of CSR and sustainability.

Paper Information