Publication Type

Working Paper

Version

publishedVersion

Publication Date

3-2014

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 1999-2011, 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 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.

Keywords

Language, Future-Time-Reference, Categories, Culture, Corporate Social Responsibility, Sustainability

Discipline

Business and Corporate Communications | Corporate Finance

Research Areas

Finance

Identifier

10.2139/ssrn.2403878

Publisher

SSRN

Comments

Revised & Resubmitted at Organization Science. Harvard Business School Working Paper No. 15-029.

Additional URL

https://doi.org/10.2139/ssrn.2403878

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