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Why do companies obtain the B corporation certification?

Why do companies obtain the B corporation certification? This study identifies the factors that influence companies to obtain the B corporation certification. Drawing from institutional isomorphism, gender socialization theory, the ethics of care and social identity theory, the authors examine the impact of geographic locality, product market competitions and owners’ demographic characteristics on a firm’s decision to be a certified B Corporation.Design/methodology/approachUsing two sets of data, a hand-collected sample of 743 small businesses receiving a B Corporation certification between 2007 and 2014 and a sample of 902 firms participating in a B Lab survey from 2011 to 2013, the authors examine factors that influence firms’ decision to obtain the B Corporation and their environment, social and governance (ESG) performance.FindingsFirms in states that are democratic-leaning, have a lower hourly wage rate or have a greater religious population are more likely to be early adopters and leaders of the B Corporation movement than those in other states. On average, states with a higher unemployment rate and more democratic-leaning voters have more B Corporation certified firms in each year and over the years. Additionally, product market competition is positively associated with firms’ likelihood of obtaining B Corporation certification and their ESG scores.Practical implicationsThis study brings new insights to the understanding of purpose-driven enterprises and factors that influence firms’ decision to go through the B Corporation verification and certification process.Originality/valueThis study establishes a theoretical foundation that becoming a B Corporation is a corporate social responsibility (CSR) action and shows that existing theories explaining the factors motivating companies to engage in CSR can also be applied to explain firms’ motivation to become B Corporations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Social Responsibility Journal Emerald Publishing

Why do companies obtain the B corporation certification?

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References (54)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1747-1117
DOI
10.1108/srj-07-2018-0170
Publisher site
See Article on Publisher Site

Abstract

This study identifies the factors that influence companies to obtain the B corporation certification. Drawing from institutional isomorphism, gender socialization theory, the ethics of care and social identity theory, the authors examine the impact of geographic locality, product market competitions and owners’ demographic characteristics on a firm’s decision to be a certified B Corporation.Design/methodology/approachUsing two sets of data, a hand-collected sample of 743 small businesses receiving a B Corporation certification between 2007 and 2014 and a sample of 902 firms participating in a B Lab survey from 2011 to 2013, the authors examine factors that influence firms’ decision to obtain the B Corporation and their environment, social and governance (ESG) performance.FindingsFirms in states that are democratic-leaning, have a lower hourly wage rate or have a greater religious population are more likely to be early adopters and leaders of the B Corporation movement than those in other states. On average, states with a higher unemployment rate and more democratic-leaning voters have more B Corporation certified firms in each year and over the years. Additionally, product market competition is positively associated with firms’ likelihood of obtaining B Corporation certification and their ESG scores.Practical implicationsThis study brings new insights to the understanding of purpose-driven enterprises and factors that influence firms’ decision to go through the B Corporation verification and certification process.Originality/valueThis study establishes a theoretical foundation that becoming a B Corporation is a corporate social responsibility (CSR) action and shows that existing theories explaining the factors motivating companies to engage in CSR can also be applied to explain firms’ motivation to become B Corporations.

Journal

Social Responsibility Journal – Emerald Publishing

Published: Aug 5, 2019

Keywords: Gender; CSR; Product market competition; Institutional isomorphism; B corporation; locality

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