AIB 2012 Conference Proceedings - Academy of International ...

MONDAY
Despite their claims to be global standards, implementation of both the GRI and the Global Compact has been
highly geographically uneven. This paper examines the factors that have influenced adoption of both standards
worldwide. Drawing from recent theoretical and empirical literature on global industry and standards, we
develop a series of hypotheses about the relationship between GRI reporting and Global Compact membership
counts and various characteristics of the national institutional environment. Our results suggest that adoption of
the GRI has been influenced by certain features of the national institutional environment as well as foreign
trade and investment. The reporting count by country is positively correlated with the level of exporting, the
presence of foreign direct investment, and transparency of institutions in that country but negatively correlated
with the strength of NGO's in the country. In the case of the Global Compact, however, we find that only
economic factors (GDP, FDI and exports) are significant. (For more information, please contact: Stephen Chen,
University of Newcastle, Australia: stephen.chen@newcastle.edu.au)
The Nature and Strategic Impact of Corporate Social Responsibility in Emerging Markets: The Case of Russia
Olga Hawn, Duke University
While most studies on corporate social responsibility (CSR) are conceptualized and conducted in the context of
developed countries, there is little understanding of what CSR means both in terms of the nature and strategic
impact on firms in emerging markets, where most of the current commercial activity takes place. This inductive
paper seeks to understand and explain the implications of CSR for Russian firms by asking what it means in that
context, how it affects their international expansion efforts and performance back at home. The results suggest
significant differences by the nature of the firm (i.e. large or small-and-medium sized) as well as by relations
with the state (i.e. mutual benefit or barrier). Implications for scholars and managers are discussed as to the
drivers of CSR heterogeneity, and its importance in overcoming liabilities in international expansion. (For more
information, please contact: Olga Hawn, Duke University, USA: olga.hawn@duke.edu)
Relationship Among Corporate Social Responsibility, Earning Management, and Audit Fee: An Event Historical
Analysis
Gunae Choi, Rutgers University
Changhee Lee, Rutgers University
Sangcheol Song, Bryant University
Using the Kinder Lydenburg Domini (KLD) investment firm social ratings dataset from 2003-2010, this study
examines the effects of CSR [ Technical CSR (TCSR) vs. Institutional CSR (ICSR)] on the probability of a firm'
engagement in earning management (EM) and then investigates the effects of EM on the probability of paying
positive or negative abnormal fees, considering the moderating effects of TCSR/ICSR. The results from a
discrete time event history analysis with time-varying independent variables show that when a firm's TCSR- or
ICSR strengths increases, the firm is likely to engage more in EM, but pay less audit fee. Likewise, when a firm's
TCSR- or ICSR concerns increases, the firm is likely to engage more in EM; but only a firm with TCSR concerns
tends to pay more audit fee. This indicates that a firm's increasing TCSR concerns can significantly affect the
auditor's risk due to its relation to internal control, while a firm's increasing ICSR concerns tends not be
connected to the auditor's risk. Such findings have implications for strategic philanthropy. A firm that focuses
more on TCSR and tries to reduce TCSR concerns than ICSR concerns appears to gain a competitive advantage
in terms of the auditor's risk. (For more information, please contact: Gunae Choi, Rutgers University, USA:
choigunae@hotmail.com)
Developing a Legitimacy-based View of Political Risk: The case of Google in China
Charles Edward Stevens, University of Wyoming
Political risk remains one of the critical factors affecting firms' strategies and performance abroad. Yet, the
nature of business-government interactions in an era of increased economic competition and
AIB 2012 Conference Proceedings
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