Dare to be different? Investigating the relationship between analyst categorisation hierarchies and corporate social responsibility (CSR) conformity

• Author: Xin Chen,Mengxi Yang,Xuanjin Chen,Xin Pan
• Date: 01 January 2020
• DOI: http://doi.org/10.1111/beer.12247
• Published date: 01 January 2020

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  wileyonlinelibrary.com/journal/beer Business Ethics: A Eur Rev. 2020;29:56–69.

© 2019 John Wiley & Sons Ltd

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Corporate soc ial responsibi lity (CSR), w hich is defined as a “ firm [going ]

beyond complian ce and [engaging] in a ctions that ap pear to furt her

some social good , beyond the interests of the fi rm and that which is

required by law” (M cWilliams, Siege l, & Wright, 200 6, p. 1), has gar‐

nered scholar s’ attention fr om the last few dec ades. From dif ferent

approaches to s tudy CSR, scholar s find institutional t heory useful for

explaining why f irms engage in CSR and the v arious forms of CSR ini‐

tiatives (Bram mer, Jackson, & Mat ten, 2012). From the per spective

of institution al theorists, firms nee d to respond to institutional p res‐

sure from the envi ronment to acquire legitim acy (Vashchenko, 2017).

Thus, firms ne ed to act in congruence wi th the prevailing insti tutional

logic, their C SR tends to be isomorphi c (Gao & Hafsi, 2017). However,

previous CSR re search has overlooked the fa ct that firms are subject

to different leve ls of institutional immunit y, referred to as low se nsi‐

tivity to inst itutional pressure (Lep outre & Valente, 2012), which may

lead to heterogeneous CSR conformity patterns.

This study at tempts to address t his gap by investigatin g how ana‐

lyst categoris ation hierarchie s (CH) affect CSR confo rmity using data

from Chinese lis ted firms. We built our the oretical foundation b ased

on the audience–c andidate fram ework. The audi ence–candidate

framework depicts a theoretical interface in which the audience, re‐

ferred to as sta keholders (Sauder, Lynn, & Podolny, 2012), comp are,

evaluate, and cat egorise candidates (e.g., orga nisations and individ‐

uals). Candidate s with higher or lowe r hierarchies h ave high insti‐

tutional immun ity, while firms in the middle of the hi erarchies have

low institutional immunity and thus exhibit different conformity pat‐

terns (Phillips & Zu ckerman, 2001). Previous re search has suggested

that the instit utional lens cou ld provide usefu l insights to discu ss

the differen ces among CSR s trategies (Fehr e & Weber, 2019). For

example, Mat ten and Moon (20 08) provide an ins titutional ex pla‐

nation for the C SR heterogeneit y between th e United States an d

Europe. Likewise , Moon, Kang, an d Gond (2010) explai n why CSR

differs bet ween different countrie s and within developed countr ies

and emerging ma rket. They find that th e institutional infr astructures

Received: 3 Sept ember 2018 

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  Revised: 1 August 2 019 

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  Accepted: 22 Septe mber 2019

DOI: 10 .1111/bee r.12247

ORIGINAL ARTICLE

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

1|2,3 |2|1

1School of Busi ness

Administr ation, Southwest ern University of

Finance and Economics, Chengdu, China

2School of Econo mics and

Management, Tsinghua University, Beijing,

China

3Marshall Sc hool of Business, Un iversity of

Southern C alifornia, Los An geles, Californ ia



Mengxi Yang, Sc hool of Economics an d

Management, Tsinghua University, Beijing,

China.

E‐mail: yangmx.15@sem.tsinghua.edu.cn



This paper investig ates how analyst categorisation hierarc hies (CH) affect corporate

social responsibili ty (CSR) conformity. We argue that firms t hat are labelled as either

high rank or low rank by ana lysts have higher institutional im munity, while firms that

are categorised as midd le rank have lower immunit y. These heterogeneous ins titu‐

tional immunities w ill affect the level s of CSR conformity d ifferently. Our result s,

which originate from a sa mple of Chinese listed firm s from 2009 to 2016, suggest th at

CH exhibit an inverted‐ U‐shaped relationship with CSR co nformity. High‐ranked and

low‐ranked firms are mos t likely to be CSR nonconformist , while middle‐ranked firms

tend to conduct CS R like the majority of th eir industry p eers. Moreover, we also in‐

vestigate the environ mental boundary condit ions of this curvilinear relati onship. This

relationship is moderated by environmental munificence (positively) and dynamism

(negatively). Our find ings fill the theo retical gap by propo sing an institutiona l‐based

explanation for the C SR conformity heterogeneity which is r arely discussed and ex‐

tending the bounda ry conditions for the categoris ation‐CSR conformity relatio nship.