The Co-Evolution of CSR Practices within Firms: Are Corporate Environmental and Social Improvements Competing or Mutually Reinforcing?

How do social and environmental dimensions of corporate social responsibility (CSR) co-evolve within firms? Are improvements in the two dimensions competing, or mutually re-enforcing? Based on the attention-based view, plausible arguments for both perspectives can be developed, taking into account the respective concepts of attention selectivity or attention spillover. Further, we hypothesize that the described relationships are moderated by firms’ resource constraints, industry, and development status of the home country. We test the developed hypotheses with a large-scale dataset containing a sample of 15,917 firm-year observations from 329 industries and 38 countries during 2008-2017. The analysis reveals that improvements in social and environmental aspects of CSR are mutually re-enforcing. Additionally, the moderating effects of resource constraints and industry are supported. Our results imply that firms could improve their broader CSR performance by focusing ona lighthouse(a byproduct of a signal)projects in select areas. Our findings have implications for theory and practice regarding CSR improvement.