Is social responsibility really “corporate”? The impact of family foundations on CSR

Theoretical arguments propose family firms as being more socially responsible than their non-family counterparts, however empirical evidence oftentimes points to the contrary. In an attempt to reconcile the seemingly disparate findings this study argues that the family beyond the firm may have been an important omitted factor in our understanding of firm heterogeneity in the corporate social responsibility (CSR) context. The paper draws on socioemotional wealth perspective to concurrently look at the business and family domains and argue that the family-centered non-economic considerations influence family owners’ decisions not only within the family firm, but also beyond its boundaries. Using a unique panel dataset of large US firms, we found that the private social activities of family owners in the form of family foundations are negatively associated with firm CSR compared to non-family firms. Moreover, we tested and confirmed that the substitution effect between the presence of a family foundation and CSR at the firm level holds only for first-generation family firms and those in which the level of family identification with the firm is low. By integrating the family level to understand firm level outcomes the study offers an initial step to capture the totality of family firm phenomena.