Resumo

Adoption of CSR practices has grown into a widely accepted concept in the past decades. This evolution was progressed by a set of institutions driving new practices representing shifts in the way firms must act in order to sustain their legitimacy. Pressures over a company’s behavior can be competing (firms are simultaneously pressured to be “like” and “different from” their peers). There is a limited understanding about variation across firms in demands for conformity versus differentiation and how it influences market responses.

Considering this context, we aim to shed some light in the CSR-CFP relationship debate, by addressing how the level of CSR conformity or differentiation of a company may affect its financial performance in the Brazilian context.

Misani (2010) argues that there is a stakeholder goodwill that may allow easier access to strategic resources, lower transaction costs and better reputation. He also implies that responsible firms may compete for this stakeholder goodwill and try to differentiate themselves from competitors, as is usually the case when firms want to achieve a competitive advantage. However, many scholars observe that firms that engage in CSR practices, do not actively differentiate their behaviors from the ones adopted by its peers (Bocean et al., 2014; Fifka et al., 2018), but converge to a set of practices.

We assembled a sample of 110 Brazilian companies listed in B3 was constituted, totaling 774 observations, related to the period 2011-2019. As a way of representing CSR practices, we used data provided by CSRHub. Given the use of regression models in this research, the data collected was used to compute dependent, independent and control variables. First, our dependent variable, is Return on Assets (ROA). Our independent variables aim to represent differentiation in the adoption of practices in the four CSR dimensions. In order to do that, we used the Mahalanobis distance.

Results show that a positive differentiation (i.e. companies above the industry median with greater distances from their peers), even though positively significant over financial performance in some CSR dimensions, the effect seems to be rather low. While a negative differentiation (i.e. companies below the industry median with greater distances from their peers), seems to have a greater negative impact on financial performance. Results indicate that a CSR strategy based on conformity instead of differentiation may be more beneficial in terms of financial performance to Brazilian companies.

Our results show that a positive differentiation has a low impact on financial performance, while the negative effect of a negative differentiation seems to be more pronounced. In this sense, our study goes along with the idea that a CSR strategy based on conformity is a better way to achieve higher financial performance. As managerial implications, our results seem to indicate that, if a company wishes to differentiate themselves regarding their CSR practices, they must focus on Community and Governance dimensions, specially those practices related to price and product quality.

Misani, N. (2010). The convergence of corporate social responsibility practices. Management Research Review, 33(7), 734-748. Zhang, Y., Wang, H., & Zhou, X. (2020). Dare to Be Different? Conformity Versus Differentiation in Corporate Social Activities of Chinese Firms and Market Responses. Academy of Management Journal, 63(3), 717-742. Zhao, E. Y., Fisher, G., Lounsbury, M., & Miller, D. (2017). Optimal distinctiveness: Broadening the interface between institutional theory and strategic management. Strategic Management Journal, 38(1), 93-113.