Motivated to be socially responsible? CEO regulatory focus, firm performance, and corporate social responsibility

This study examines the interactive effect of CEOs’ regulatory focus and corporate financial performance (CFP) on the firm’s corporate social responsibility (CSR). While prior research has examined the influence of CEOs’ psychological attributes on CSR, less attention has been devoted to understanding how the firms’ CFP impacts this relationship. Drawing on regulatory focus theory and the behavioral theory of the firm, we integrate these CEO-level and organizational-level mechanisms into an overarching theoretical framework that explains when and how CEOs are motivated to engage in CSR. We propose that promotion-focused (prevention-focused) CEOs will engage in CSR when CFP is above (below) aspirations but disengage from CSR when CFP is below (above) aspirations. We find partial support for these hypotheses using a sample of 1,250 U.S. firms.