Publication Type
Journal Article
Version
publishedVersion
Publication Date
4-2019
Abstract
Building on the literature on optimal distinctiveness, this study explores the effects of conformity and differentiation in corporate social responsibility (CSR) practices on the evaluations by security analysts and the responses of the financial market in general. We develop the argument that while conformity in CSR scope enhances analyst coverage, differentiation in CSR emphasis leads to more-favorable analyst recommendations and higher market value. This suggests that firms may be able to simultaneously conform in CSR scope and differentiate in CSR emphasis to achieve optimal distinctiveness. To further enhance our understanding of the variation in the relationship between conformity/differentiation and the response of analysts and the market, we investigate how some firm- and analyst-level factors moderate this relationship. Using the case of corporate social activities of Chinese listed firms during the period from 2008 to 2014, we show that scope conformity has a stronger effect on analyst coverage for state- owned firms and firms with higher visibility; on the other hand, the relationship between emphasis differentiation and analyst recommendation/market value strengthens for firms covered by high- status brokerage houses but weakens for those experiencing high earnings pressure.
Keywords
optimal distinctiveness, corporate social responsibility, securities analysts
Discipline
Asian Studies | Business Law, Public Responsibility, and Ethics | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Academy of Management Journal
Volume
63
Issue
3
First Page
717
Last Page
742
ISSN
0001-4273
Identifier
10.5465/amj.2017.0412
Publisher
Academy of Management
Citation
ZHANG, Yanlong; WANG, Heli; and ZHOU, Xiaoyu.
Dare to be different? Conformity versus differentiation in corporate social activities of Chinese firms and market responses. (2019). Academy of Management Journal. 63, (3), 717-742.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6495
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.5465/amj.2017.0412
Included in
Asian Studies Commons, Business Law, Public Responsibility, and Ethics Commons, Strategic Management Policy Commons