Using CSR to Complement or Substitute National Institutions? The Value of Balancing Firm Attention



We theorize that institutional contexts and managerial action combine to influence the financial impact of firms’ discretionary CSR activities. Broadly, firms can design their CSR activities to complement the dominant institutions of their local environment and/or to substitute for the dominant institutions in their local environment. We use fsQCA to test which approach is financially rewarding, analyzing a cross-national sample of firms spanning 2004-2011. We find that, depending on context, a substitutionary, a complementary or a strategy of refraining from strong CSR can be financially rewarding. In contrast, firms that pursue an unfocused, all-encompassing CSR strategy systematically underperform. We discuss the implications of the interplay between institutional context and strategy in determining the financial value of CSR.  


Donal Crilly is assistant professor of strategy and entrepreneurship at the London Business School. His research focuses on the roles of cognition and language in explaining how firms respond to stakeholder concerns and how managers devise strategy. His work is published in journals including the Academy of Management JournalStrategic Management Journal, and Organization Science, and he is on the editorial boards of the Academy of Management JournalJournal of International Business StudiesStrategic Management Journal, and Strategic Organization. He received his Ph.D. in strategy from INSEAD,