Speaking of corporate social responsibility

• Main Authors: LIANG, Hao, MARQUIS, Christopher, RENNEBOOG, Luc, SUN, Sunny Li
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Language; Future-Time-Reference; Categories; Culture; Corporate Social Responsibility; Sustainability; Business and Corporate Communications; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5417; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6416/viewcontent/SSRN_id2403878.pdf
• Institution: Singapore Management University

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.