Análisis y tabulación de datos de encuestas

The focus in this section is on the determinants of compulsory CSR. The definition of CSR adopted for this research encompasses on purpose compulsory and voluntary aspects of CSR. This position runs purposely against one strand of the CSR literature that understands CSR as beyond the requirements of the law. As Moon (2007) points out comprehensibly, it makes no sense to keep the voluntary requirement to define CSR. Depending on the institutional environment, regulations incorporate or not CSR activities. Would companies be deemed irresponsible by merely abiding by the law? Furthermore, being a responsible company also starts by conducting business in a responsible way, by respecting the interests of the company’s primary stakeholders (Davis, 1973; Carroll, 1979, 1999; Waddock, 2001).

Table 5.7 reports the results of the correlation matrix between compulsory CSR and company level variables. Similar to the correlation matrix obtained for the general measure of CSR, the table suggests than only economic performance and economic performance of the company compared to its competitors are positively and significantly correlated to compulsory CSR. This category of CSR does not appear to be influenced by the size of the company, its age, or its industry. That results are coherent and expected because CSR is incorporated within the legal framework of the country, leaving a small or no margin of actions for companies.

Table 5.5 suggests that the correlation between the compulsory aspect of CSR and the institutional variables is less strong than for the general level of CSR. In absolute terms, the correlation coefficient is 0.18, which identifies a low relationship. The correlations are in the same directions than for the general level of CSR. The correlation is positive for the common law and governance variables, and negative for the others. Even though, compulsory CSR is weakly correlated with national institutions, this seems to corroborate the substitute theory of CSR, where liberal market institutions are more favourable to CSR.

Moving on to the regression results, they mainly confirm this line of explanation. Overall, the regression is significant at a significance level of 0.001 with an adjusted R2 of 0.2573. Table 5.8 shows that four regression coefficients are significant.

Table 5.7 Correlation table with compulsory CSR Compulsory CSR country of origin Company size Company age Industry # of domestic competitors # of international competitors Eco. Perf. Eco. Perf. compared to competitors Private ownership Eco. Freedom Compulsory CSR 1 country of origin -0.18* 1 Company size -0.05 0.16* 1 Company age 0.02 0.03 0.46*** 1 Industry -0.05 0.00 -0.13 -0.00 1 # of domestic competitors 0.04 -0.15 -0.08 -0.14 0.19** 1 # of international competitors 0.17 -0.08 0.05 -0.04 0.03 0.58*** 1 Eco. Perf. 0.41*** -0.12 0.10 -0.11 -0.10 0.12 0.14 1

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Compulsory CSR t-value

country of origin (0= UK; 1= France) -0.1397527 -1.34

Size of the company -0.0437266* -1.92

Age of the company 0.0747347 1.13

Industry -0.0009504 -0.09

Number of domestic competitors -0.0403613 -1.32

Number of international competitors 0.0282205** 2.49

Economic performance 0.1925324** 2.69

Economic performance compared to competitors 0.2463841* 2.33

Constant 2.53355*** 7.04 Adjusted R squared 0.2573 F 7.52 N 162 Prob > F 0 Notes:

* Results significant at a significance level of p <0.05 ** Results significant at a significance level of p <0.01 *** Results significant at a significance level of p < 0.001

Table 5.8 suggests that the country of origin has no impact on the compulsory aspect of CSR providing no support for Hypothesis 1 in both its developments. In other words, the findings demonstrate that, in this instance, national institutions, hence varieties of capitalism, play no part. This conclusion signals an alignment in regulations between France and the UK. This harmonisation comes mainly from the European Union which has promulgated few directives to ensure equal and non-discriminatory treatment of employees (see article 13 of the Treaty of Amsterdam 1997; the Employment Equality Framework Directive (2000/78); Racial Equality Directive (2000/13)), customer protection (see the Directive on Consumer Rights (2011/83)) and investor information (see the Transparency Directive (2004/109) revised by the Transparency Directive (2013/50)). By virtue of European law mechanisms, member states are provided with minimum standards they are forced to transpose into their national regulation.

The result regarding the size of the company indicates that the bigger the company, the less involved it is in compulsory CSR. This result provides support for neither Hypothesis 2a nor Hypothesis 2b. Despite a small value, the coefficient is nonetheless significant (p<0.05). This finding is surprising as it would suggest at first that larger companies do not necessarily obey by the laws in these areas. Second, it is not very consistent with the role of economic performance assuming that economic success comes hand in hand with size. According to Table 5.7, the correlation between size and economic performance is very small and not significant. This finding remains unexpected as it contradicts studies connecting size and public visibility and scrutiny. The latter constraints companies’ actions by applying public pressure on them (Brammer and Millington, 2006).

It could be argued that larger companies with their economic and knowledge power benefit from a better understanding of national regulations. One could anticipate that sometimes large companies accommodate with laws that are detrimental to their business interests. Such an explanation echoes the view by which company size is actually a reflection of organisational power and influence (Meznar and Nigh, 1995). In that sense, size can be indirectly

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positive correlation between financial success and CSR actions (Waddock and Graves, 1997; Weber, 2008; Carroll and Shabana, 2010; Porter and Kramer, 2011). Economic success makes companies more visible to the public eye and scrutiny (Brammer and Millington, 2006). With the increasing power of social media and technology, what Moon (2007) identifies as the social driver of CSR, they are under the constant scrutiny of financial institutions, non-governmental organisations and customers’ groups. They cannot afford to violate the law, in particular to preserve their reputation, in an obvious visible way. Besides, responsible behaviours can strengthen that very image and reputation. One should keep in mind though that regression analysis does not equate to causation and only indicates correlation. Whether CSR is the result of economic success or economic success the product of CSR, the question is still open. The business case for CSR defends the latter. One could argue though that economic success is necessary to launch initial CSR actions which then might improve further the financial situation of a given company.

The number of international competitors is a significant factor (p<0.01) supporting hypothesis 6. This coefficient is nevertheless small, suggesting a limited effect on the compulsory component of CSR. The more international competitors a company experiences, the more involved it will be in compulsory CSR. Even though this result may appear surprising at first, it can be explained by the position and power a company possesses on the international business stage. The number of international competitors increases visibility, scrutiny and therefore the pressure to act in accordance with the law. Companies are maintaining their license to operate while building ‘reputational capital’ (Jamali, 2010, p. 628).

Finally, when it comes to the legal aspects of CSR, the question of compliance and the associated cost of non-compliance is raised as for any other regulated matters (Bullis and IE, 2007). The fact that compulsory CSR is explained by company size, the number of international competitors and economic performance indicate a discrepancy between regulation and obedience. Companies face a dilemma between complying or disobeying the law with costs associated to both actions. This question might be even more acute in a legal environment such as the French one where regulations are more prominent than in the UK. The dilemma between abiding or not by the law is summarized by Bullis & IE (2007, p. 325): ‘while it may seem surprising that some organizations would not adopt a stance of compliance, it makes sense that unless enforcement is expected and compliance is rewarded, a company might find that the costs of compliance far outweigh the benefits’.