A stakeholder resource-based view of corporate social irresponsibility: Evidence from China

Following the stakeholder resource-based view (SRBV), we conceptualize the value relevance of corporate social irresponsibility (CSI) based on the stakeholders' bargaining power and interests in the well-being of the firm, and classify the stakeholders into residual claimants (i.e., customers, shareholders) and fixed claimants (i.e., employees, environment). Using curated detailed news data of 816 CSI episodes and 56,503 Chinese government daily publications from June 2006 to July 2012, we find that CSI episodes alienating residual claimant stakeholders lead to greater shareholder value destruction. Drawing from the stakeholder salience, we find that CSI episodes alienating high legitimacy claims of shareholders and customers, high urgency claims of employees, and powerful claims of customers result in a more pronounced underperformance. Although there are potentially overlapping boundaries between fixed and residual claimants under special circumstances, the findings provide implications for firms making strategic decisions involving multiple stakeholders.