Journal of Business Ethics

, Volume 134, Issue 3, pp 479–491 | Cite as

The Signaling Effect of Corporate Social Responsibility in Emerging Economies

  • Weichieh Su
  • Mike W. Peng
  • Weiqiang Tan
  • Yan-Leung Cheung


What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility (CSR) practices? We argue that in emerging economies, firms that adopt CSR practices positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm’s financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institution-based view can jointly contribute to the CSR literature.


Signaling theory Corporate social responsibility Institutional voids Institutional environments 


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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Weichieh Su
    • 1
  • Mike W. Peng
    • 2
  • Weiqiang Tan
    • 3
  • Yan-Leung Cheung
    • 4
  1. 1.Department of International Business, College of CommerceNational Chengchi UniversityTaipeiTaiwan
  2. 2.Jindal School of ManagementUniversity of Texas at DallasRichardsonUSA
  3. 3.School of BusinessHong Kong Baptist UniversityKowloon TongHong Kong SAR
  4. 4.Hong Kong Institute of EducationTai PoHong Kong SAR

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