The Importance of CSR Strategic Fit and the Times of Economic Hardship

Previous research investigating the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) revealed the importance of industry specificity. Drawing on strategic stakeholder theory, we argue that the strategic fit between CSR activities and value chain activities contributes to the industry-specific effects in the CSR-CFP relationship. Given the multidimensional nature of CSR, some CSR activities will be more impactful for certain industries than others, because industries differ in value chain activities and salient stakeholders. Specifically, we propose and test a set of hypotheses for two industries positioned on the different ends of the industry spectrum based on their ecological footprint – healthcare and resource extraction. We further examine the industry specificity of the CSR-CFP relationship by exploring external economic conditions (the 2008-2009 recession) as a boundary condition. Our study contributes to the extant literature by demonstrating the role of strategic fit between CSR and value chain activities in explaining the influence of CSR on CFP. Additional testing of this mechanism in the times of economic hardship adds a unique aspect to our theoretical and empirical contributions.