RT Generic
T1 Corporate social responsibility and inventory policy
A1 Barcos, Lucía
A1 Barroso, Alicia
A1 Surroca, Jordi
A1 Tribó, Josep A.
A2 Universidad Carlos III de Madrid. Instituto para el Desarrollo Empresarial (INDEM), 
AB In this article, we study the impact of implementing corporate social responsible (CSR) practices on afirm’s inventory policy. Our proposal is that there is an inverted U-shape relationship between firms’ CSR andtheir inventory levels. Two elements explain such proposal. First, stakeholders have different interestsregarding the outcome of the inventory system. Specifically, we hypothesize that customers pressurefirms to increase inventories; employees have conflicting views regarding inventories and, for thisreason, they do not pressure firms in a particular direction; and environmental activists force firms toreduce inventories. The second reason is that there is different level of stakeholder proactivenesscontingent on the intensity in the implementation of social responsible policies. In particular, we positthat for low levels of CSR, customers are more relevant, while for larger levels other stakeholders gainmore importance.We test this theoretical prediction by crossing two databases, COMPUSTAT, for financial data, andKLD for data on social responsibility. Our final database contains data on 1881 different US companies for theperiod 1996-2006. The results found conform to our theoretical prediction.Our analysis will be helpful to strategic and tactical decision-making processes on inventorymanagement and will allow researchers to offer concrete advice on the likely outcomes of various stakeholderrelationship practices in order to improve the effectiveness of inventory systems. Additionally, the connectionbetween CSR and inventory policies has interest at a macroeconomic level given that, on the one hand, there is agrowing tendency for firms to behave in a socially responsible way. On the other, inventories are responsible forup to 87% of the total peak-to-trough movement in GDP. Thus, our results suggest that this tendency toincorporate the social dimension in firms’ strategy should smooth out the overall economic cycle given thatfirms apply more intensive CSR policies in the expansive periods (decreasing inventories) rather than during thedownturns (increasing inventories).
SN 1989-8843
YR 2010
FD 2010-09
LK https://hdl.handle.net/10016/9313
UL https://hdl.handle.net/10016/9313
LA eng
DS e-Archivo
RD 27 jul. 2024