Politics and Corporate Social Responsibility

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-01-06

Summary:

Editor's Note: The following post comes to us from Alberta Di Giuli of the Department of Finance at ESCP Europe and Leonard Kostovetsky of the Finance Area at the University of Rochester.

In our paper, Are Red or Blue Companies More Likely to Go Green? Politics and Corporate Social Responsibility, forthcoming in the Journal of Financial Economics, we test the hypothesis that Democratic-leaning firms (i.e., firms with a higher proportion of Democratic stakeholders) are associated with more socially responsible policies than Republican-leaning firms. Our results can be illustrated by a comparison of Starbucks and Wendy's, two large and well-known food and drink retailers. Starbucks started as a coffee beans store in 1971 and began to grow as a popular coffeehouse chain in the late 1980s after entrepreneur Howard Schultz bought it. Schultz, who is the current CEO and Chairman of Starbucks, is a well-known Democrat who donated $130,500 to Democratic federal candidates and only $1,000 to Republicans over his lifetime. In addition, Starbucks was founded and is currently headquartered in Seattle, Washington, a bastion of progressivism and the Democratic Party.

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Link:

http://blogs.law.harvard.edu/corpgov/2013/12/30/politics-and-corporate-social-responsibility/

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Tags:

academic research corporate social responsibility alberta di giuli environmental disclosure human rights leonard kostovetsky political spending

Authors:

R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

01/06/2014, 15:58

Date published:

12/30/2013, 09:00