Abstract
We investigate the role of social-media-triggered public pressure on corporate social responsibility (CSR) that includes expectations of transparency and accountability on the firm’s part, and participative/evaluative inputs on the public’s part. Using the date when S&P 500 firms established corporate Twitter accounts, we investigate the impact of corporate social media exposure on CSR outcomes. Results from baseline regressions indicate that firms with Twitter accounts significantly outperform industry peers in CSR rating, after controlling for firm and industry characteristics. To test potential reverse causality, we use a dynamic treatment effect model to explore within firm changes of CSR, and find that firms’ CSR rating improves in year one- and year two after establishing a Twitter account, while no difference emerged in similar comparisons with peers prior to the Twitter account establishment. Additionally, Granger causality tests results show that corporate Twitter presence improves CSR performance; it is also shown that CSR outcomes do not motivate corporations to establish a social media presence on Twitter. Finally, firms with more experience (number of years) on Twitter, and those with more followers, tweets or Twitter accounts are associated with improved CSR outcomes. We draw on two theories and qualitative interviews with senior CSR executives to explain why social media influences CSR firm behaviors.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Consider the example of Starbucks. On October 15th, 2017, the company posted a tweet about its donation to Northern California wildfire. A user named Iris Chrysopteron replied “Please do the same for Puerto Rico” due to the damage caused by the hurricane. Starbucks responded to state that they had donated $125,000 to a fund to aid recovery efforts in Puerto Rico. Similarly, on October 10th, 2017, Walmart tweeted about their donation to Puerto Rico on Jimmy Fallon’s Tonight show. A user named Cathy Peace posted a picture depicting a Walmart store in Puerto Rico with inadequate supplies and mentioned that “People aren’t getting the donations and your aisles are empty. They need supplies whether they buy them or are given to them through aid efforts.” At the same time, a Facebook post by Walmart claimed that people in the United States could buy groceries online for family and friends in Puerto Rico and have them use the grocery pick-up option at their local stores. In fact, the service did not work as advertised. This news went viral on social media prompting Walmart to release a statement correcting their erroneous post on Facebook.
A survey by Conference Board and the Rock Center for Corporate Governance at Stanford University suggests that 59% of companies in the survey use social media to interact with customers, 49% to advertise, and 35% to research customers. Approximately 30% use social media to research competitors, research new products and services, or communicate with employees and other stakeholders (Larcker et al. 2012).
Because of data limitations, the time period for number of followers is between 2012 and 2014.
Industry is defined using SIC code information shown in Panel B of Table 1.
We compare the two groups from 2007 because there is only one company in our database with a Twitter account in 2006.
In order to capture the dynamic effect, we extend our basic sample by 1 year.
References
Adams, M., & Hardwick, P. (1998). An analysis of corporate donations: United Kingdom evidence. Journal of Management Studies, 35(5), 641–654. https://doi.org/10.1111/1467-6486.00113.
Albalawi, Y., & Sixsmith, J. (2015). Agenda setting for health promotion: Exploring an adapted model for the social media era. JMIR Public Health and Surveillance. https://doi.org/10.2196/publichealth.5014.
Araujo, T., & Kollat, J. (2018). Communicating effectively about CSR on Twitter: The power of engaging strategies and storytelling elements. Internet Research, 28(2), 419–431. https://doi.org/10.1108/IntR-04-2017-0172.
Benkler, Y. (2006). The wealth of networks: How social production transforms markets and freedom. New Haven: Yale University Press.
Berman, S. L., Wicks, A. C., Kotha, S., & Jones, T. M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. Academy of Management Journal, 42(5), 488–506. https://doi.org/10.2307/256972.
Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69(2), 111–132. https://doi.org/10.1007/s10551-006-9071-z.
Brower, J., & Mahajan, V. (2013). Driven to be good: A stakeholder theory perspective on the drivers of corporate social performance. Journal of Business Ethics, 117(2), 313–331. https://doi.org/10.1007/s10551-012-1523-z.
Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons. https://doi.org/10.1016/0007-6813(91)90005-G.
Ceron, A., Curini, L., & Iacus, S. M. (2016). First- and second-level agenda setting in the Twittersphere: An application to the Italian political debate. Journal of Information Technology & Politics, 13(2), 159–174. https://doi.org/10.1080/19331681.2016.1160266.
Chatterji, A. K., Levine, D. I., & Toffel, M. W. (2009). How well do social ratings actually measure corporate social responsibility? Journal of Economics & Management Strategy, 18(1), 125–169.
Chiang, K. C. H., Wachtel, G. J., & Zhou, X. (2019). Corporate social responsibility and growth opportunity: The case of real estate investment trusts. Journal of Business Ethics, 155(2), 463–478. https://doi.org/10.1007/s10551-017-3535-1.
Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches. Thousand Oaks: SAGE Publication.
Dawkins, J. (2004). Corporate responsibility: The communication challenge. Journal of Communication Management, 9(2), 108.
Deardorff, R. B. (2010, December). Countering violent extremism: The challenge and the opportunity. Defense Technical Information Center. https://apps.dtic.mil/docs/citations/ADA536895
Di Giuli, A., & Kostovetsky, L. (2014). Are red or blue companies more likely to go green? Politics and corporate social responsibility. Journal of Financial Economics, 111(1), 158–180. https://doi.org/10.1016/j.jfineco.2013.10.002.
Donia, M. B. L., Ronen, S., Tetrault Sirsly, C.-A., & Bonaccio, S. (2019). CSR by any other name? The differential impact of substantive and symbolic CSR attributions on employee outcomes. Journal of Business Ethics, 157(2), 503–523. https://doi.org/10.1007/s10551-017-3673-5.
Edelman. (2012). Executive Summary: 2012 Edelman goodpurpose® Study | Brand | Corporate Social Responsibility. Scribd. https://www.scribd.com/document/90411623/Executive-Summary-2012-Edelman-goodpurpose-Study. Accessed 25 December 2018
El Ghoul, S., Guedhami, O., Kwok, C. C., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388–2406.
Etter, M. (2014). Broadcasting, reacting, engaging: Three strategies for CSR communication in Twitter. Journal of Communication Management, 18(4), 322–342. https://doi.org/10.1108/JCOM-01-2013-0007.
Farache, F., Tetchner, I., & Kollat, J. (2018). CSR communications on Twitter: An exploration into stakeholder reactions. In G. Grigore, A. Stancu, & D. McQueen (Eds.), Corporate responsibility and digital communities: An international perspective towards sustainability (pp. 145–163). Cham: Springer International Publishing.
Fieseler, C., Fleck, M., & Meckel, M. (2010). Corporate social responsibility in the blogosphere. Journal of Business Ethics, 91(4), 599–614. https://doi.org/10.1007/s10551-009-0135-8.
Freeman, R. E. (1984). Strategic management: A stakeholder perspective. Englewood Cliffs: Prentice Hall.
Freeman, R. E. (2007). Managing for stakeholders. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1186402.
Granger, C. W. J. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424–438.
Guo, L., & Vargo, C. (2015). The power of message networks: A big-data analysis of the network agenda setting model and issue ownership. Mass Communication and Society, 18(5), 557–576. https://doi.org/10.1080/15205436.2015.1045300.
Hansen, C. B. (2007). Generalized least squares inference in panel and multilevel models with serial correlation and fixed effects. Journal of Econometrics, 140(2), 670–694. https://doi.org/10.1016/j.jeconom.2006.07.011.
Hansen, L. K., Arvidsson, A., Nielsen, F. A., Colleoni, E., & Etter, M. (2011). Good friends, bad news: Affect and virality in Twitter. In J. J. Park, L. T. Yang, & C. Lee (Eds.), Future information technology (pp. 34–43). Berlin: Springer.
Hasan, I., Kobeissi, N., Liu, L., & Wang, H. (2018). Corporate social responsibility and firm financial performance: The mediating role of productivity. Journal of Business Ethics, 149(3), 671–688. https://doi.org/10.1007/s10551-016-3066-1.
Hoi, C. K., Wu, Q., & Zhang, H. (2018). Community social capital and corporate social responsibility. Journal of Business Ethics, 152(3), 647–665. https://doi.org/10.1007/s10551-016-3335-z.
Hong, H., Kubik, J. D., & Scheinkman, J. A. (2012). Financial Constraints on Corporate Goodness. Working paper. https://doi.org/10.3386/w18476
Hsu, A., Koh, K., Liu, S., & Tong, Y. H. (2019). Corporate social responsibility and corporate disclosures: An investigation of investors’ and analysts’ perceptions. Journal of Business Ethics, 158(2), 507–534. https://doi.org/10.1007/s10551-017-3767-0.
Ihlen, Ø., & Roper, J. (2014). Corporate reports on sustainability and sustainable development: ‘We have arrived’: Corporate reports. Sustainable Development, 22(1), 42–51. https://doi.org/10.1002/sd.524.
Jahdi, K. S., & Acikdilli, G. (2009). Marketing communications and corporate social responsibility (CSR): Marriage of convenience or shotgun wedding? Journal of Business Ethics, 88(1), 103–113. https://doi.org/10.1007/s10551-009-0113-1.
Kent, M. L., & Taylor, M. (2016). From homo economicus to homo dialogicus: Rethinking social media use in CSR communication. Public Relations Review, 42(1), 60–67. https://doi.org/10.1016/j.pubrev.2015.11.003.
Laasch, O., & Conaway, R. N. (2015). Principles of responsible management: Global sustainability, responsibility, and ethics. Stamford: Cengage Learning.
Larcker, D. F., Larcker, S. M., & Tayan, B. (2012, October). 2012 Social Media Survey. Stanford Graduate School of Business. https://www.gsb.stanford.edu/faculty-research/publications/2012-social-media-survey. Accessed 2 March 2019
Lee, K., Oh, W.-Y., & Kim, N. (2013). Social media for socially responsible firms: analysis of fortune 500’s Twitter Profiles and their CSR/CSIR ratings. Journal of Business Ethics, 118(4), 791–806. https://doi.org/10.1007/s10551-013-1961-2.
Lee, Y.-J., O’Donnell, N. H., & Hust, S. J. T. (2019). Interaction effects of system-generated information and consumer skepticism: An evaluation of issue support behavior in CSR twitter campaigns. Journal of Interactive Advertising, 19(1), 15–28. https://doi.org/10.1080/15252019.2018.1507853.
Lippmann, W. (1949). Public opinion. New York: MacMilllan.
Lyon, T. P., & Montgomery, A. W. (2013). Tweetjacked: The impact of social media on corporate greenwash. Journal of Business Ethics, 118(4), 747–757. https://doi.org/10.1007/s10551-013-1958-x.
Makni, R., Francoeur, C., & Bellavance, F. (2009). Causality between corporate social performance and financial performance: Evidence from Canadian firms. Journal of Business Ethics, 89(3), 409–422. https://doi.org/10.1007/s10551-008-0007-7.
Maon, F., Lindgreen, A., & Swaen, V. (2009). Designing and implementing corporate social responsibility: An integrative framework grounded in theory and practice. Journal of Business Ethics, 87(S1), 71–89. https://doi.org/10.1007/s10551-008-9804-2.
Martin, G. W., Thomas, W. B., & Wieland, M. M. (2016). S&P 500 membership and managers’ supply of conservative financial reports: S&P 500 membership and managers’ supply. Journal of Business Finance & Accounting, 43(5–6), 543–571. https://doi.org/10.1111/jbfa.12200.
McCombs, M. (2005). A look at agenda-setting: Past, present and future. Journalism Studies, 6(4), 543–557.
McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of management Journal, 31(4), 854–872.
Meraz, S. (2009). Is there an elite hold? Traditional media to social media agenda setting influence in blog networks. Journal of Computer-Mediated Communication, 14(3), 682–707. https://doi.org/10.1111/j.1083-6101.2009.01458.x.
Meraz, S. (2011a). The fight for ‘how to think’: Traditional media, social networks, and issue interpretation. Journalism, 12(1), 107–127. https://doi.org/10.1177/1464884910385193.
Meraz, S. (2011b). Using time series analysis to measure intermedia agenda-setting influence in traditional media and political blog networks. Journalism & Mass Communication Quarterly, 88(1), 176–194. https://doi.org/10.1177/107769901108800110.
Merriam, S. B., & Tisdell, E. J. (2016). Qualitative research: A guide to design and implementation. San Fransico: Jossey-Bass.
Morsing, M., & Schultz, M. (2006). Corporate social responsibility communication: Stakeholder information, response and involvement strategies. Business Ethics: A European Review, 15(4), 323–338. https://doi.org/10.1111/j.1467-8608.2006.00460.x.
Morsing, M., Schultz, M., & Nielsen, K. U. (2008). The ‘Catch 22’ of communicating CSR: Findings from a Danish study. Journal of Marketing Communications, 14(2), 97–111. https://doi.org/10.1080/13527260701856608.
MSCI ESG Research Inc. (2015). MSCI ESG KLD stats: 1991–2014 data sets (p. 75). MSCI ESG Research Inc.
Murray, K. B., & Vogel, C. M. (1997). Using a hierarchy-of-effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: Financial versus nonfinancial impacts. Journal of Business Research, 38(2), 141–159. https://doi.org/10.1016/S0148-2963(96)00061-6.
Natalia, A. (2017). The agenda setting hypothesis in the new media environment. Comunicación y Sociedad. https://doi.org/10.32870/cys.v0i28.2929.
Nelling, E., & Webb, E. (2009). Corporate social responsibility and financial performance: The “virtuous circle” revisited. Review of Quantitative Finance and Accounting, 32(2), 197–209. https://doi.org/10.1007/s11156-008-0090-y.
Neuman, W. R., Guggenheim, L., Jang, S. M., & Bae, S. Y. (2014). The dynamics of public attention: Agenda-setting theory meets big data: Dynamics of public attention. Journal of Communication, 64(2), 193–214. https://doi.org/10.1111/jcom.12088.
Oh, H., Bae, J., & Kim, S.-J. (2017). Can sinful firms benefit from advertising their CSR Efforts? Adverse effect of advertising sinful firms’ CSR engagements on firm performance. Journal of Business Ethics, 143(4), 643–663. https://doi.org/10.1007/s10551-016-3072-3.
O’Riordan, L., & Fairbrass, J. (2008). Corporate social responsibility (CSR): Models and theories in stakeholder dialogue. Journal of Business Ethics, 83(4), 745–758. https://doi.org/10.1007/s10551-008-9662-y.
Platikanova, P. (2016). S&P 500 index addition, liquidity management and Tobin’s Q. Accounting & Finance, 56(2), 479–508. https://doi.org/10.1111/acfi.12105.
Ranängen, H. (2017). Stakeholder management theory meets CSR practice in Swedish mining. Mineral Economics, 30(1), 15–29. https://doi.org/10.1007/s13563-016-0098-z.
Reilly, A. H., & Hynan, K. A. (2014). Corporate communication, sustainability, and social media: It’s not easy (really) being green. Business Horizons, 57(6), 747–758. https://doi.org/10.1016/j.bushor.2014.07.008.
Reilly, A. H., & Larya, N. (2018). External communication about sustainability: Corporate social responsibility reports and social media activity. Environmental Communication, 12(5), 621–637. https://doi.org/10.1080/17524032.2018.1424009.
Roberts, M. R., & Whited, T. M. (2013). Chapter 7: endogeneity in empirical corporate finance. In G. M. Constantinides, M. Harris, & R. M. Stulz (Eds.), Handbook of the economics of finance (pp. 493–572). Amsterdam: Elsevier.
Saxton, G. D., Gomez, L., Ngoh, Z., Lin, Y.-P., & Dietrich, S. (2019). Do CSR messages resonate? Examining public reactions to firms’ CSR efforts on social media. Journal of Business Ethics, 155(2), 359–377. https://doi.org/10.1007/s10551-017-3464-z.
Seifert, B., Morris, S. A., & Bartkus, B. R. (2003). Comparing big givers and small givers: Financial correlates of corporate philanthropy. Journal of business ethics, 45(3), 195–211.
Shi, W., Pathak, S., Song, L. J., & Hoskisson, R. E. (2018). The adoption of chief diversity officers among S&P 500 firms: Institutional, resource dependence, and upper echelons accounts: The adoption of chief diversity officers. Human Resource Management, 57(1), 83–96. https://doi.org/10.1002/hrm.21837.
Sormanen, N., Lauk, E., & Uskali, T. (2017). Facebook’s ad hoc groups: A potential source of communicative power of networked citizens. Communication & Society, 30(2), 77–95. https://doi.org/10.15581/003.30.2.77-95.
Spiggle, S. (1994). Analysis and interpretation of qualitative data in consumer research. Journal of Consumer Research, 21(3), 491. https://doi.org/10.1086/209413.
Stohl, C., Etter, M., Banghart, S., & Woo, D. (2017). Social media policies: implications for contemporary notions of corporate social responsibility. Journal of Business Ethics, 142(3), 413–436. https://doi.org/10.1007/s10551-015-2743-9.
Stohl, M., Stohl, C., & Townsley, N. C. (2007). A new generation of global corporate social responsibility. Oxford: Oxford University Press.
Tian, Q., & Robertson, J. L. (2019). How and when does perceived CSR affect employees’ engagement in voluntary pro-environmental behavior? Journal of Business Ethics, 155(2), 399–412. https://doi.org/10.1007/s10551-017-3497-3.
Udayasankar, K. (2008). Corporate social responsibility and firm size. Journal of Business Ethics, 83(2), 167–175. https://doi.org/10.1007/s10551-007-9609-8.
Valenzuela, S., Puente, S., & Flores, P. M. (2017). Comparing disaster news on Twitter and television: An intermedia agenda setting perspective. Journal of Broadcasting & Electronic Media, 61(4), 615–637. https://doi.org/10.1080/08838151.2017.1344673.
Vo, T. T., Xiao, X., & Ho, S. Y. (2019). How does corporate social responsibility engagement influence word of mouth on Twitter? Evidence from the airline industry. Journal of Business Ethics, 157(2), 525–542. https://doi.org/10.1007/s10551-017-3679-z.
Waddock, S. (2003). Myths and realities of social investing. Organization & Environment, 16(3), 369–380. https://doi.org/10.1177/1086026603256284.
Waddock, S. A., & Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic Management Journal, 18(4), 303–319. https://doi.org/10.1002/(SICI)1097-0266(199704)18:4<303:AID-SMJ869>3.0.CO;2-G.
Wang, X., Cao, F., & Ye, K. (2018). Mandatory corporate social responsibility (CSR) reporting and financial reporting quality: Evidence from a quasi-natural experiment. Journal of Business Ethics, 152(1), 253–274. https://doi.org/10.1007/s10551-016-3296-2.
Wettstein, F. (2012). CSR and the debate on business and human rights: Bridging the great divide. Business Ethics Quarterly, 22(4), 739–770. https://doi.org/10.5840/beq201222446.
Whiting, A., & Williams, D. (2013). Why people use social media: A uses and gratifications approach. Qualitative Market Research: An International Journal, 16(4), 362–369. https://doi.org/10.1108/QMR-06-2013-0041.
Yin, J., Feng, J., & Wang, Y. (2015). Social media and multinational corporations’ corporate social responsibility in China: The case of ConocoPhillips Oil Spill incident. IEEE Transactions on Professional Communication, 58(2), 135–153. https://doi.org/10.1109/TPC.2015.2433071.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflicts of interest.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Electronic supplementary material
Below is the link to the electronic supplementary material.
Appendices
Appendix 1: Unpacked KLD measure analysis
Variables | (1) | (2) | (3) | (4) | (5) | (6) |
|---|---|---|---|---|---|---|
Innovative giving | Clean energy | Cash profit sharing | Retirement benefit concern | Promotion | Product quality | |
Twittert−1 | 0.088*** | 0.060*** | 0.005* | − 0.033*** | 0.005* | 0.052*** |
(8.571) | (5.113) | (1.842) | (− 2.910) | (1.652) | (11.857) | |
Assetst−1 | 0.065*** | 0.090*** | 0.010*** | − 0.010* | 0.027*** | 0.014*** |
(9.580) | (14.996) | (4.544) | (− 1.727) | (7.064) | (8.332) | |
ROAt−1 | 0.130** | − 0.254*** | 0.002 | − 0.133*** | − 0.005 | 0.136*** |
(2.092) | (− 3.184) | (0.083) | (− 3.658) | (− 0.267) | (6.009) | |
Book-to-markett−1 | 0.015 | 0.007 | 0.007 | 0.038*** | − 0.011* | − 0.016*** |
(0.977) | (0.407) | (1.607) | (3.366) | (− 1.909) | (− 3.300) | |
Casht−1 | 0.135*** | 0.222*** | 0.097*** | − 0.065** | 0.011 | − 0.099*** |
(3.063) | (4.392) | (6.745) | (− 2.060) | (0.694) | (− 8.445) | |
Dividendst−1 | 0.460* | 1.342*** | 0.135* | − 0.076 | 0.143* | 0.478*** |
(1.698) | (4.586) | (1.819) | (− 0.580) | (1.824) | (4.704) | |
Debtt−1 | 0.080** | − 0.140*** | − 0.021* | 0.079** | − 0.022 | 0.116*** |
(2.002) | (− 2.931) | (− 1.690) | (2.284) | (− 1.525) | (11.503) | |
Constant | − 0.553*** | − 0.732*** | − 0.112*** | 0.731*** | − 0.244*** | 0.022 |
(− 3.010) | (− 2.936) | (− 5.054) | (3.386) | (− 6.632) | (0.128) | |
Observations | 3190 | 3565 | 3310 | 1733 | 2487 | 2861 |
Industry dummy | Y | Y | Y | Y | Y | Y |
Year dummy | Y | Y | Y | Y | Y | Y |
Appendix 2: Factor analysis
Panel A: Eigenvalue of three factors
Factor | Eigenvalue | Difference | Proportion | Cumulative |
|---|---|---|---|---|
Factor1 | 1.10007 | 1.22791 | 1.4347 | 1.4347 |
Factor2 | − 0.12784 | 0.07761 | − 0.1667 | 1.2679 |
Factor3 | − 0.20545 | − 0.2679 | 1 |
Panel B: Factor loadings
Variable | Factor1 |
|---|---|
Log followers | 0.6276 |
Log tweets | 0.6424 |
Year experience | 0.5417 |
Rights and permissions
About this article
Cite this article
Balasubramanian, S.K., Fang, Y. & Yang, Z. Twitter Presence and Experience Improve Corporate Social Responsibility Outcomes. J Bus Ethics 173, 737–757 (2021). https://doi.org/10.1007/s10551-020-04537-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-020-04537-x