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ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.10 No.11 pp.49-56
DOI : http://dx.doi.org/10.13106/ijidb.2019.vol10.no11.49

Product Market Competition and Corporate Social Responsibility Activities

Hae-Young RYU1, Soo-Joon CHAE2
1 First Author, Assistant Professor of Hansei University, Department of Business Administration. Email: hyryu@hansei.ac.kr

ⓒ Copyright: Korean Distribution Science Association (KODISA)
This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted noncommercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
2 Corresponding Author, Professor of Kangwon National University, Department of Business Administration. Email: sjchae@kangwon.ac.kr
October 10, 2019 October 31, 2019 November 05, 2019

Abstract

Purpose: Corporate social responsibility is a self-regulating business model that helps a firm be socially accountable to the public. By practicing corporate social responsibility, firms can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. Corporate social responsibility activities are not directly linked to increasing corporate performance and corporate value, but rather involve spending expenses. Based on these facts, this study verifies whether the effects of corporate social responsibility activities differ depending on the firm's situation. Research design, data and methodology: This study analyzed the effect of market competition on corporate social responsibility activities using logistic regression analysis on listed companies in the KOSPI and KOSDAQ for fiscal years 2014 through 2016. In this study, market competition was measured using the Herfindahl-Herschman Index(HHI). Higher HHI value can be interpreted as a lower degree of market competition. We also measured corporate social responsibility activities using the KEJI Index published by the Korea Economic Justice Institute (KEJI). If a firm-year is included in the top 200 companies of the KEJI Index, it is classified as a good corporate social responsibility activity firm. Results: We find that companies in less competitive market were not included in the KEJI Index. This result indicates that firms in the market with lower market competition perform less corporate social responsibility activities that incur costs. An additional analysis showed that there was a significant negative relationship between the market competition and the corporate social responsibility activity scores published by the KEJI Index. These result adds robustness to the result of the hypothesis that firms that have a monopolistic place in the market practice passive corporate social responsibility activities. Conclusions: The results show that managers of a firm in the lower market competition have a lower incentive to use limited resources for projects that are not directly related to revenue. The results of this study imply that corporate social responsibility activities vary according to the position of the business. Therefore, this study suggests that market investors should consider the degree of competition in the market when they evaluate corporate social responsibility activities.

JEL Classification Code : D52, G30, M41

제품 시장 경쟁 및 기업의 사회적 책임 활동

류혜영, 채수준

초록


     

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