Public trust's duality in the CSP - reputation - financial performance relationship across countries

Within the literature investigating relationships among Corporate Social Performance (CSP), Corporate Reputation (CR), and Corporate Financial Performance (CFP) (Orlitzky, Schmidt, & Rynes, 2003; Waddock & Graves, 1997), we identify two lines of inquiry. First, scholars have investigated the effect that CSP has on CR, “the overall estimation in which a particular company is held by its various constituents” (Fombrun, 1996: 36). Most maintain that CSP enhances CR (Fombrun & Shanley, 1990; Wang & Berens, 2014), with some exceptions (Walker & Dyck, 2014). Second, scholars concur that CR enhances CFP (Newburry, 2010; Roberts & Dowling, 2002). We argue that public trust in business (Harris, Moriarty, & Wicks, 2014) plays an important moderating role in the CSP-CR-CFP relationship, as some have implicitly suggested (Barnett, 2007; Du, Bhattacharya, & Sen, 2010). Public trust in business, or more accurately public trust in the institution (North, 1990) of business, is “the level and type of vulnerability the public is willing to assume with regard to business relations” (Bolton et al., 2009: 6). Public trust in business has been declining since the 1960s (Nye, Zelikow, & King, 1997) remaining at low levels since the 1990s (Wicks et al., 2014). Although both managers (Business Roundtable Institute for Corporate Ethics, 2004) and academics (Wicks et al., 2014) agree that low levels of public trust can harm, inadequate research has investigated its effect on firms (Harris et al., 2014; Bolton et al., 2009). We aim to partially rectify this deficiency. Here, we draw on signaling theory to investigate the role that public trust in business (Bolton et al., 2009) has in moderating the relationship among CSP, CR and CFP. We argue that levels of public trust towards business influence the CSP-CR-CFP relationship and develop hypotheses regarding this influence. Given that national context may systematically influence the CSP-CFP relationship (Gardberg & Fombrun, 2006) and that public trust in business may vary cross-nationally (e.g. Chan, Lam, & Liu, 2011), we test our hypotheses on an unbalanced panel of 462 firms from 2006-12 from 9 countries (a total of 2534 observations)

The impact of corporate philanthropy on reputation for corporate social performance

This study seeks to examine the mechanisms by which a corporation’s use of philanthropy affects its reputation for corporate social performance (CSP), which the authors conceive of as consisting of two dimensions: CSP awareness and CSP perception. Using signal detection theory (SDT), the authors model signal amplitude (the amount contributed), dispersion (number of areas supported), and consistency (presence of a corporate foundation) on CSP awareness and perception. Overall, this study finds that characteristics of firms' portfolio of philanthropic activities are a greater predictor of CSP awareness than of CSP perception. Awareness increases with signal amplitude, dispersion, and consistency. CSP perception is driven by awareness and corporate reputation. The authors’ contention that corporate philanthropy is a complex variable is upheld, as we find that CSP signal characteristics influence CSP awareness and perception independently and asymmetrically. The authors conclude by proposing avenues for future research

Economy size and performance: an efficiency analysis in the telecommunications sector

The existing empirical evidence on the relationship between economy size and performance has been inconclusive. This paper employs stochastic frontier analysis to estimate economic measures of efficiency for the telecommunications sectors of 139 economies and examine their relationship with economy size. Simultaneously, it controls for the effects of competition in telecommunications, privatization of state-owned providers, independent regulators, and the quality of political institutions on sector performance. The findings suggest that economy size has a positive but decreasing impact on sector performance. Small economies have an incentive to grow to improve sector performance, though larger size is not a sufficient condition for efficiency. Sector policy and the quality of polity may contribute significantly to sector performance

Does smallness affect the liberalisation of telecommunications? The case of Cyprus

A review of the literature on small economies and on telecommunications policy suggests that policy makers disregard the possible effects of the size of the economy on liberalisation outcomes. This paper builds on the literature on small economies to classify economy size according to economic, demographic, and geographical measures in order to empirically examine whether small size affects the effective culmination of liberalisation of telecommunications. A cluster of small economies that have a maximum population of 9.2 million (Guinea), GDP of US $86.17 billion (Singapore), and arable area of 19.3 thousand km2 (Central African Republic) are the main focus of analysis. In particular, the paper capitalises on an in-depth analysis of the liberalisation of telecommunications in Cyprus and an econometric analysis of the respective European experience. The country-specific outcomes of liberalisation in Cyprus are consistent with the general tendency in small European economies and jointly provide strong evidence that smallness affects the success of liberalisation. The paper concludes with an array of policy suggestions for small economies.Small economies Liberalisation Telecommunications Competition policy Cyprus European Union

Economy size and performance: An efficiency analysis in the telecommunications sector

The existing empirical evidence on the relationship between economy size and performance has been inconclusive. This paper employs stochastic frontier analysis to estimate economic measures of efficiency for the telecommunications sectors of 139 economies and examine their relationship with economy size. Simultaneously, it controls for the effects of competition in telecommunications, privatization of state-owned providers, independent regulators, and the quality of political institutions on sector performance. The findings suggest that economy size has a positive but decreasing impact on sector performance. Small economies have an incentive to grow to improve sector performance, though larger size is not a sufficient condition for efficiency. Sector policy and the quality of polity may contribute significantly to sector performance.Economy size Performance Telecommunications Policy Polity Stochastic frontier analysis