August 2006
Academy of Management Annual Meeting Proceedings;2006, pG1
Conference Proceeding
Corporate social responsibility (CSR) and stakeholder research has long assumed that industry is a defining characteristic for firm behavior and is frequently included as a control variable in empirical research. Drawing on management and political strategy literatures this is the first study that explicitly examines structural characteristics of industries and stakeholder relations. We examine how a firm's stakeholder relations are affected by five industry characteristics: regulation, concentration, industry rivalry, industry visibility and the manufacturing sector. Four stakeholder relations are of interest: employees, consumers, communities and the natural environment. Using 11,695 observations over 14 years, we compiled financial, stakeholder and industry data from Compustat, the Kinder, Lydenberg, and Domini (KLD) Socrates database and the Bureau of Economic Analysis from 1991 to 2004. We modeled stakeholder strengths and stakeholder concerns separately resulting in eight regression models. We found all five industry characteristics significantly affect stakeholder relations. Firms in visible industries have limited stakeholder strengths. While interestingly, we found that regulations are not a panacea for stakeholder relations. Regulated industries had significantly more concerns in many, but not all, stakeholder relations while having significant stakeholder strengths. Firms in concentrated and manufacturing industries also had significant strengths and concerns in most stakeholder relations. Only industry rivalry had widespread impacts on all stakeholder relations. Industry rivalry encouraged significantly more strengths while limiting concerns with all stakeholder relations via 'virtuous circle' rivalry. Firms in industries with 'race to the bottom' rivalry, on the other hand, had significantly more concerns across all stakeholder relations.


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