Trait-based Imitation of CSR: The Moderating Effect of Corporate Image Advertising

This study investigates the determinants of corporate social responsibility (CSR) in the Korea Composite Stock Price Index (KOSPI) listed firms based on the theoretical arguments of trait-based imitation in uncertainty. This study assumes that an organization’s decision-making occurs under bounded rationality and acquires social legitimacy by past behavior or by imitating other organizations to reduce uncertainty. We used an unbalanced panel data of 6,364 observations from 464 firms from 2000 to 2019 using KIS Value, TS2000, and disclosed business reports to test our research hypotheses. The fixed-effects model results for the unbalanced panel data are as follows: Firms that had been active in CSR in the past tended to participate more actively in CSR. Also, firms execute CSR more actively if other firms with similar status show a high level of CSR. These results reveal that firms imitate corporate decision-making in their experience or similar-status firms’ activities. In addition, corporate image advertising positively moderates the relationship between the organization’s CSR and those of companies in similar positions. This study has significance in that it further expanded the scope of theoretical explanation by introducing the theoretical argument that CSR is an act of decision-making in uncertainties and trait-based imitation made under bounded rationality. Furthermore, this study provides an empirical basis for further research on CSR by determining the variables that induce CSR.