Wages and Corporate Social Responsibility: Entrenchment or Ethics?

Patricia Crifo, Marc-Arthur Diaye () and Sanja Pekovic ()
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Marc-Arthur Diaye: University Paris 1 Panthéon Sorbonne (CES)
Sanja Pekovic: University of Montenegro

No 2024-03, Working Papers from Center for Research in Economics and Statistics

Abstract: In this article we examine how Corporate Social Responsibility (CSR) affects the wage policy of firms. At first glance, one may think that socially responsible firms want to attract employees via ethical concerns and corporate culture, thereby inducing a negative link between CSR and wages. On the other side, socially responsible firms can be expected to increase wages as social entrenchment strategies. In order to correct for potential endogeneity bias, we employ a simultaneous equation model (SEM) on French data set that includes 13, 186 employees. We show that CSR has an ambiguous impact on corporate wage policy depending on the type of monetary incentives and employee’s occupation considered. We extend prior research on the CSR-wage relationship by distinguishing between different forms of monetary incentives: base wage, total wage and premium wage. Our results draw attention to the fact that the employees’ occupation do matter. The evidence confirms that the effect of CSR on wage is not to be taken for granted: it is wage form and occupation specific.

Keywords: corporate social responsibility; wage compensation; motivation (search for similar items in EconPapers)
JEL-codes: C30 J30 M14 M52 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-03-06
New Economics Papers: this item is included in nep-eur
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Related works:
Working Paper: Wages and corporate social responsibility: entrenchment or ethics? (2022)
Working Paper: Wages and corporate social responsibility: entrenchment or ethics? (2022)
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