Impact Of Firm Network On Corporate Social Responsibility

Firm network is an important aspect of corporate governance,developed through board directors,by sharing director with the board of directors of corresponding firm for sharing information,technology,skills,and knowledge to achieve required financial goals.We analyze the relation of firms network and corporate social responsibility in term of following corporate social responsibility indicators;environment,social and governance.We report the result of our analysis that the firm network created by board of directors depends on its nature,if the network of a firm among a directors are strong then their investment in corporate social responsibility will be low because firm strong network result in strong financial position due to which firm show more conservatism towards spending in such activities which have no economic motivations and treated as a cost of firm.The priority of investment in societal attributes also depends on the firm legitimacy and stakeholder perspective.Firm grab investment from market by legitimizing firm output on the bases of financial disclosures,hence stakeholder behavior is based on economic perspective of firms and they considered the social operations of firm;waste of time and just a source of satisfaction to feel better.Sarbanes-Oxley Act have large impact on firm governance body so we analyze the trend after and before being SOX act made official,in respect of relationship between firm network and CSR.Using a sample of 1446 companies containing 13885 observations,from different industries driven from S&P 1500 index,dated 1996 to 2014 on annual bases after merging data we get data from 1996 to 2009 and observation were reduce to 7134 to give support to our hypothesis.Our study suggest that the degree of firm network developed by directors for achieving required goals with respect to firm nature and stakeholder expectation,reduce the leniency to take interest in corporate social responsibility by being a part of social activities.