We compare the strategic behavior of cooperatives to alternative organizational forms (for-profit and state-owned organizations) in the pursuit of community-based benefits beyond profits. Specifically, we examine credit cooperatives, where clients (borrowers) are owner-members, and analyze their responses to the increased digitalization of the banking sector. We hypothesize that client ownership amplifies the importance of in-person relational channels, prompting cooperatives to retain more physical branches as digitalization accelerates. We also posit that the propensity of cooperatives to keep those branches increases in vulnerable markets and when cooperatives are organized as single vs federated organizations. To test our hypotheses, we track 46,143 Brazilian bank branches between 2012 and 2021 and their reactions to a regulatory change that accelerated digitalization in the financial sector. Consistent with our predictions, credit cooperatives keep a stronger physical presence than other organizational forms following the regulatory change, particularly in vulnerable areas. However, contrary to our expectations, cooperative federations expand more than single ones, benefiting from their improved scale and governance structures designed to support new entries. Overall, this study sheds light on the role of cooperatives as a relevant organizational form in which clients exert pronounced strategic influence, yielding critical implications for organizational strategy and value allocation.

Socially responsible investment (SRI) funds claim to invest in firms with high social performance and engage with them to push them to improve their social performance. However, based on existing empirical evidence, it remains unclear whether they actually do so. Therefore, to assess whether SRI funds attempt to deliver on their promises, we examine how they respond when firms are targeted by activist hedge funds. As activist hedge funds often get firms to redirect their resources and managerial attention toward their priorities (which are often related to short-term financial performance), there is an impending risk that firms' social performance declines. Given this risk, it is important to ask whether SRI funds fight to push firms to prioritize social performance or they avoid investing in such firms to ensure that they have firms with high social performance in their portfolio. Using the difference-in-differences methodology, we analyze panel data on 462 firms from 2010 to 2022 and find evidence suggesting that SRI funds flee rather than fight. This finding illustrates that SRIs prioritize delivering on their promise of investing in socially responsible firms over their promise of engaging in activism to make firms socially responsible.

This study explores the configuration of multi-partner collaborations (MPCs). While the pooling of resources and sharing of risks among multiple partners offer substantial benefits, they also introduce governance complexity and collaboration costs associated. Previous research suggests proposed dominant-partner governance as a solution, where powerful partners act as peacekeepers and coordinators to mitigate collaboration challenges. This solution, however, assumes that the dominant partner possesses both the expertise and objectives aligned with the collective entity. We examine the effects of dominant-partner governance within the context of project-financed infrastructure projects. We investigate the role of government as a dominant partner and find that while such involvement tends to reduce the size and diversity of expertise within the group, these negative impacts are moderated by the government’s collaborative capabilities and its reliance on resources from private partners. Based on an original dataset of more than 1,200 projects across 68 countries and five sectors from 1997 to 2020, our findings contribute to a nuanced understanding of MPC dynamics and configuration.

We develop a conjectural variation model of strategic Corporate Social Responsibility (CSR) orchestration in business groups, drawing on characteristics of fungibility and scale-free deployment to derive generalizable insights on the mechanisms of intangible resource allocation. The model shows how structural position and resource characteristics jointly determine optimal distribution patterns, emphasizing how groups balance cooperative value creation against competitive rent extraction when coordinating partially non-rival resources like brands, knowledge, and reputation. Using disaggregated CSR data from Indian firms from 2000-2013, we document two distinct channels of influence. First, through strategic coordination, where core firms lead value-enhancing resource creation with 42.5% higher sensitivity to industry CSR propensity compared to standalone firms. Second, through pyramidal ownership structures that enable tunneling via asymmetric cost allocation, particularly pronounced for high-fungibility activities. These effects are more than twice as large for reputation-enhancing CSR compared to localized community investments, consistent with differential resource transferability. Our findings extend internal markets theory beyond tangible capital allocation by developing micro-foundations for how rational economic agents navigate the tension between value creation and private benefits in coordinating strategic investments in less contractible resources.

This study examines how stakeholder orientation influences a firm’s likelihood of becoming an acquisition target. Firms with high stakeholder orientation foster complex, trust-based relationships with stakeholders, creating resources that are socially embedded and causally ambiguous. This complexity poses two challenges for prospective acquirers. First, the information mechanism highlights difficulties in evaluating stakeholder-oriented firms’ resource configurations due to their intangible and opaque nature, increasing perceived risks of adverse selection. Second, the combination mechanism addresses concerns about integrating relational resources, which are often deeply tied to firm-specific routines and difficult to transfer post-acquisition. Analyzing 3,684 U.S.-listed firms (1991–2012), the study finds a negative association between stakeholder orientation and acquisition likelihood, driven primarily by information asymmetry. These findings provide a nuanced understanding of stakeholder resources in acquisition dynamics.

We investigate why distributors struggle to scale last-mile distribution of durable goods in Base of the Pyramid (BoP) markets, introducing the concept of supply chain relationship resilience—the ability to recover from disruptions, measured as the ratio of post-disruption to pre-disruption revenue. We build a model to demonstrate how supply chain relationship resilience shapes a distributor’s allocation of retailers to sales executives. If resilience levels are uniform across informal and formal retailers, the distributor’s optimal assignment to sales executives is fully unbalanced (i.e., most sales executives handle only one etailer type). We then show how accounting for differences in supply chain relationship resilience can dramatically change the firm’s optimal sales executive assignment strategy.

Using data from 319 formal and 505 informal retailers in India, we employ quasi-experimental methods to examine how supply chain relationship disruptions affect subsequent retailer performance. While formal retailers show no significant effects, informal retailers experience a 43.5% decrease in order value relative to the control group, with no sustained recovery within four 60-day periods post-disruption. These findings highlight the importance of relationship resilience in BoP operations, suggesting that managers should consider informal retailers' lower resilience when allocating resources and designing distribution strategies to improve last-mile delivery performance.

Urban riots, as nascent social movements, create significant challenges for firms by disrupting local communities and impacting firm performance and survival. In this paper, we investigate how community embeddedness—defined as the socio-demographic and cultural alignment between a firm and its local community—moderates the relationship between riot intensity and firm outcomes. Using data from firms in riot-impacted and non-impacted cities following the 2005 urban riots in the Paris area, we find that community embeddedness positively moderates the negative effect of riot intensity on short-term performance. However, in the long term, greater community embeddedness is associated with a higher risk of firm failure in high-intensity riot contexts. Our results, therefore, provide evidence of a paradox of embeddedness for firms deeply impacted by the riots—where deeper integration with the local community provides short-term benefits but leads to long-term vulnerabilities— which highlights the complexities firms face when balancing local ties and adaptability in volatile environments.

The diffusion of technological innovations in low and middle-income countries has been facilitated by the use of Rent-To-Own (RTO) business models, which give flexibility to consumers by allowing them to make incremental payments over time. Motivated by an application of RTO to the distribution of solar lamps in low and middle-income countries, we examine the drivers and impact of payment flexibility on repayment performance and consumer behavior in RTO contracts. We formulate a stochastic dynamic programming model that characterizes an important dimension of payment flexibility, i.e., the ability of consumers to make bundled payments (multiple installments paid at once, in advance). We characterize when and why bundled payments are more likely to occur. We examine different flexibility levers that the firm can adjust as part of its contract design (repayment frequency/installment amount, grace period), accounting for the impact of bundled payments. Our results show that an intermediate level of flexibility could benefit both the firm and consumers under some conditions. Our findings indicate that a moderate level of flexibility can go a long way in helping firms and consumers in these environments. Hence, RTO firms may not need to offer extreme degrees of flexibility in order to achieve desirable outcomes.

This paper explores how regulatory ambiguity—a distinct yet related concept to uncertainty—plays a crucial and understudied role in shaping entrepreneurial entry into regulated markets. Unlike uncertainty, which can be reduced by acquiring more information, ambiguity arises from the presence of multiple, conflicting interpretations of existing information and may persist or even increase with additional data. Our study proposes that regulatory ambiguity increases with imprecise regulatory language, creating cracks in the rigid regulatory environment that allow entrepreneurs to actively experiment. To explore this, we leverage regulatory ambiguity in state policies regarding geothermal energy definitions between 1960 and 1990. Using a synthetic control method, our results show that ambiguity increases market entry, with effects largely driven by de novo entrants. Further analyses suggest that increased ambiguity leads to greater use of advanced technologies among market entrants. This study stresses the importance of accounting for ambiguity when examining how organizations respond to complex institutional environments.

This study examines how U.S. power sector firms respond to environmental regulation violations, focusing on facilities flagged by the EPA for non-compliance. In response, these plants implement various strategies to reduce air pollution and prevent future violations, including cutting electricity generation, improving fuel quality, reducing coal use, installing scrubbers, enhancing pollution controls, and investing in energy-efficient generators. Organizational efficiencies and government subsidies further strengthen these efforts. While these actions aid environmental recovery, the costs of compliance are often passed on to local communities through higher electricity prices, raising concerns about social equity. Following a violation, firms generally experience increases in assets, capital expenditures, debt, revenues, and electricity prices, yet operating income remains unaffected. Our findings highlight that while market competition and government subsidies can help alleviate some of the financial burden on consumers, these subsidies often fall short of promoting the long-term investments in advanced technologies necessary for sustained environmental progress.

This paper argues that business ethics as a field requires a normative reconstruction of its foundations. Over the course of several centuries, social misdevelopments have occurred in the economic sphere of business firms and markets. Successive approaches in business ethics such as those flying under the banners of corporate social responsibility, stakeholder theory, ESG (environmental, social, and governance), and business purpose have so far proven inadequate to the task of addressing these misdevelopments because they do not go deep enough to explore the normative foundations of the division of labor in society. The social philosopher Axel Honneth, following Friedrich Hegel, Adam Smith, and others, has argued for a method of “normative reconstruction.” This paper reviews Honneth’s approach in the context of business ethics. It argues for a normative reconstruction of business that recommends institutional change from both the bottom up (business participants) and the top down (governance and law).

How significant are pay gaps in the U.S.? Utilizing the release of Type 2 EEO-1 forms by the Department of Labor, which covers over 11,000 public and private U.S. contractors, we estimate gender and race/ethnicity pay disparities. Our analysis reveals that these government contractor firms save, on average, over $49 million annually for public firms and $6 million for private firms by employing women and minorities. Notably, private firms exhibit larger pay gaps per worker than public firms, and pay disparities increase with firm size within both public and private sectors. We also analyze market reactions to the disclosure of these EEO-1 forms and identify a positive association between market responses and the size of the firm's pay gap, indicating that investors perceive pay gaps as net value-enhancing. Our results remain consistent across various control variables, including firm productivity, workplace diversity, the job functional structure, and state and industry influences. These insights should enlighten stakeholders regarding the magnitude, drivers, and market valuation of pay gaps. Moreover, they imply that capital markets alone may not effectively resolve systemic pay inequities in the U.S.

Industry awards convey status and visibility to their winners, but evaluation biases can limit how equitably these benefits are distributed. Indeed, award-giving organizations are often criticized for not recognizing the achievements of women and racial minority workers. Interventions to close these gender and racial gaps have focused on diversifying award committees to reduce evaluation biases, with mixed direct effects on awards decisions. This paper investigates the indirect effects of these interventions, specifically how diversifying award committees influences hiring decisions within the evaluated industry. Using archival data on 193,394 hiring decisions on 6,999 films released in the U.S. from January 2010 to April 2021, I examine an intervention by the Academy of Motion Picture Arts and Sciences to increase the number of women and racial minority Oscar voters. The results show a positive association between the Academy’s intervention and the likelihood of award-seeking film productions hiring women or racial minority workers. Moreover, these hiring effects are concentrated in visible occupations and primarily benefit workers who are Academy members, suggesting a strong strategic component in organizations’ response to the evaluator’s diversity intervention. These findings provide insights into the role that awards and third-party evaluators can play in reducing inequality within an industry.

Focusing on a firm’s imbalance between internal and external stakeholder orientations, we propose that the impact of this stakeholder disparity on the firm’s market value depends on country-level trust. Integrating sociology research on societal trust with strategy research on corporate social responsibility (CSR), we argue that firms in countries with higher outgroup trust experience more negative effects from gaps between internal and external CSR actions. In contrast, in countries with greater ingroup trust compared to outgroup trust, the negative impact of the CSR gap on firm value is mitigated. Our empirical analysis of firms across 46 countries supports our predictions. Our study is the first to theoretically and empirically demonstrate the multilevel social capital framework on firm value throughout the cross-national investigation of the interactive influence of firm-level stakeholder orientations and country-level trust radius.

This study explores the impact of local opioid exposure on the performance of U.S. public firms and examines whether these effects propagate through supply chain networks to their downstream customers. Methodology/results: Analyzing a sample of 2,617 public suppliers and 1,473 public customers from 2003 to 2020, the study finds that firms headquartered in areas with high opioid exposure see a reduction in sales. We establish causality by using the introduction of staggered state-level prescription drug monitoring programs (PDMPs) as exogenous shocks to opioid exposure and running a difference-in-differences (DID) test to analyze the impact. PDMPs could mitigate the negative impact of opioid exposure, resulting in a 5.7% increase in sales. Furthermore, we document that this negative impact propagates to downstream customers: a one-standard-deviation increase in supplier opioid exposure, measured by the average opioid-related death rate across the headquarters counties of its suppliers, reduces customer sales by 2.92%. This relationship is causal and holds when controlling for customers’ opioid exposure. We rule out the alternative explanations of common shocks. The spillover effect is more pronounced when suppliers are in labor-intensive industries and when customers face higher costs for switching suppliers. Finally, customers make strategic adjustments to manage supplier opioid risks.

This study examines the distributional consequences of broadening stakeholder governance; i.e. expanding firm governance rights to non-equity, or contracted, stakeholders. We theorize that broadening stakeholder governance initially reduces the residual value left to equity providers, due to increased coordination costs and heightened claims on firm resources by contracted stakeholders. However, these effects diminish as firms with broadened stakeholder governance mature. Over time, diminishing coordination costs and increasing returns from firm-specific investments generate enough value to increase the residual value left to equity providers. Additionally, we propose that contracted stakeholders with governance rights are willing to compromise their claims when the focal firm faces economic difficulties. As a result of these dynamics, we argue that broadening stakeholder governance is likely to increase firm survival. To test these arguments, we analyze longitudinal French tax and archival data on firm with varying governance structures. Taken together, our findings highlight the temporal trade-offs of stakeholder governance, which bear implications for value creation and value capture dynamics in firms with broadened stakeholder governance.

When multinational corporations engage in tax avoidance while committing significant human rights abuses, they epitomize the worst excesses of globalization: imposing severe social costs on workers, communities, and the environment while depriving states of the fiscal resources necessary to address these harms. This dual failure—economic and ethical—poses serious risks to democratic governance. Analysing data from 83 of Europe’s largest corporations (2000–2020), this paper explores the link between tax avoidance and human rights violations, highlighting the moderating influence of institutional investors. Our findings reveal that firms investing in tax havens jurisdictions are also more likely to directly abuse human rights, with institutional ownership reducing this tendency. Notably, the connection between tax avoidance and rights violations is strongest when abuses occur outside Europe.

This study examines how social connectivity, particularly face-to-face interactions, enhances user engagement and collective action within social mission platforms (SMPs), using recycling behavior as a focal point. While digital platforms typically expand through network effects and online interactions, we argue that integrating face-to-face communication can significantly increase participation and group cohesion and improve platform effectiveness. Through a case study of the recycling SMP Yoyo and two experimental studies, we find that face-to-face interactions increase first-time participants’ recycling contributions but can also trigger collective flight, where disengagement by some participants prompts broader declines in participation. Furthermore, we find that simply invoking social connectivity through communication frames, embedded in a targeted messaging campaign, can encourage “idle” participants to follow through and start contributing to the SMP’s objectives. These findings underscore the value of interpersonal connections in SMP design while highlighting potential risks related to group dynamics. We discuss the implications for SMP design strategies and suggest future research directions to deepen our understanding of digital-physical engagement for social impact.

This paper adopts a question-driven approach to compare the strategies of for-profit firms and non-profits when entering markets for social services and their connection to long-term firm outcomes. It examines the period following legislation that, for the first time, allowed for-profit firms to operate in Brazil’s higher education market. Using quantitative analysis and qualitative interviews, we show that, compared to non-profits, for-profit firms started operations with broader service portfolios, offered more market-oriented degrees and adopted more flexible human resource management. These strategies were positively associated with firm survival and growth, accounting for a significant share of the performance differences between for-profits and non-profits. Differences in the social orientation of non-profits partially explained these disparities. This research underscores the role of for-profit firms in the provision of social services.

CEOs engaging in activism have an opportunity to shape how individuals perceive their views on the specific issue they are addressing. Moreover, such activism can prompt individuals to update their perceptions of the CEO’s stance on other social or political issues, as well as their views on the company’s work environment. In a pre-registered experiment, we examine how individuals update their beliefs about CEOs and their companies when exposed to CEO activism. Our findings indicate that individuals adjust their beliefs about the CEO’s views on the focal issue in alignment with the CEO’s stance. Additionally, they revise their perceptions of the CEO’s positions on other social or political issues and the company’s work environment when informed about the CEO’s stance on an individual issue. These results underscore the nuanced and constrained ways individuals update their beliefs about CEOs and firms, with the CEO’s inferred political ideology emerging as a key mechanism influencing these updates.

We examine how social movement organizations (SMOs), particularly third-party rating agencies, can catalyze rapid shifts in social norms among an organizational population. We propose that rating agencies can instigate new social norms by defining appropriate and acceptable standards of performance that prompt organizations to realign their behaviors to mirror these new standards, thereby accelerating changes in shared understandings regarding appropriate firm behavior. We tested our theory by analyzing how members of the S&P 500 index adapted to a new gender diversity rating by KLD Research & Analytics, focusing on the acceptance and implementation of gender diversity standards on corporate boards during the early 1990s. Our results suggest that firms rated for their gender diversity were more likely to increase female board representation, particularly those firms initially not meeting the standard set by the rating agency. This public rating not only shifted behavior, but also shifted the underlying norm for gender diversity among S&P 500 companies. These findings challenge the traditional view that social change is gradual and highlight the potential of ratings as an alternative governance tool for practitioners and policy makers interested in changing corporate behavior.

We examine the effectiveness of both implicit and explicit contracting in linking executive compensation to environmental and social targets ("ES Pay"). Consistent with predictions from contract theory, firms with explicit ES Pay schemes demonstrate better ES performance for targets that can be precisely measured, such as emissions. By contrast, implicit ES Pay schemes are ineffective for targets that are easily measurable. However, they are effective and can even outperform explicit schemes for targets with less precise performance measures, such as community engagement. While our results show that the use of effective ES Pay is uncommon so far, they indicate that firms could improve their ES performance by utilizing explicit contracts for measurable targets and implicit contracts for hard-to-measure targets.

Firms increasingly need to attend to diverse stakeholder groups with different demands and integrate a variety of sometimes-competing societal priorities within their business activities. Yet corporate sustainability research provides limited insight into how different sustainability dimensions may potentially interact, often implicitly assuming independence across diverse sustainability dimensions. We illustrate this issue by documenting how efforts to accelerate growth of green jobs to mitigate climate change appears to be associated with a negative impact in terms of slowing down progress towards meeting workforce diversity goals. Our empirical analysis relies on detailed online job profile data on over 16 million individual job positions in 713 Fortune 1000 firms in the US between 2011 and 2022. We further explore micro-level mechanisms behind this trade-off, specifically those related to the locational features typical of green jobs, as potentially driving this effect. We argue that making progress on one dimension of sustainability sometimes have undesirable effects on another dimension, thus highlighting potential trade-offs among different dimensions within sustainability, challenging that these can be pursued independently. In doing so, we contribute to the emerging literature on the multiplicity of dimensions within sustainability and the potential trade-offs encountered in managing across multiple dimensions.

Green patents are especially suitable for firms to gain distinctive market positions because of their high novelty. However, the high uncertainty and pressure by regulation and society incentivize firms to gain legitimacy by following competitors. Applying a strategic balance lens, we explain how green patenting distinctiveness contributes to firm value. Firms also struggle to maintain green patenting persistence and supplement green patents with green CVC investments. As ideal distinctiveness needs to be balanced across several strategic dimensions in the green context, green patenting persistence and green CVC portfolio distinctiveness are important moderators to consider. We find that green patenting persistence does not significantly affect the association between green patenting distinctiveness and firm value. However, green CVC portfolio distinctiveness negatively moderates this association because its saliency undermines legitimacy. We build our empirical tests on a multi-source dataset of S&P 500 firms from 2008 to 2023.

We examine the comparative role of public versus private actors in addressing grand challenges through adoption of desalination technologies that vary in sustainability dimensions. While prior research has explored how governments promote new technologies via supply-side (e.g., via subsidies), we explore public (versus private) actors’ role on demand-side (as clients). Using data on historical droughts and all desalination investments worldwide (1950s-2015), we find that, while private clients respond with more plants launched, public clients are associated with more energy-efficient technology choices. Crucially, this effect is contingent upon the institutional development of the countries. We further demonstrate how both sector investments are associated with negative externalities through environmental pollution. By highlighting sustainability trade-offs, we foster a better understanding of economic organizing for pressing societal issues.

New generations of workers are increasingly conscious of the harmful consequences of business activities on the environment. Firms that fail to align with environment-related imperatives risk censure and stigmatization from current and future employees. Our study examines how elite corporate law firms’ ability to hire entry-level workers is affected when adding stigmatized (oil and gas) clients to their portfolio. Our findings suggest that taking on stigmatized clients can reduce the ability of firms to hire graduates from leading law schools. Thus, these elite firms are subject to negative demand-side externalities in the rookie labor market. However, firms can offset this negative hiring implication and deflect stigma-by-association by allowing workers to engage in more meaningful work (“stigma cleansing”) and by offering a greater range of services to non-stigmatized clients (“stigma dilution”).

Firms apply substantive and symbolic actions and communication to enhance their legitimacy and reputation in response to the complex institutional environment. Corporate sustainability and its communication have become integral to firms' legitimacy and reputation. When companies design sustainability communication strategies, they constantly seek to uphold a legitimate image by aligning with given societal norms and expectations. Firms do so while simultaneously trying to build a positive reputation based on differentiation. This multiple case study aims to understand how this balancing act can lead to unintentional greenwashing or brownwashing. The results describe three observed interplays of legitimacy and reputation and associated (non)communication risk–greenwashing and brownwashing practices. The findings reveal that building on pragmatic legitimacy contributes to credibility and brings the lowest risk of communication distortion. The study contributes to research on the relationship between reputation and legitimacy and joins the ongoing debate about the dynamics of greenwashing and brownwashing. By so doing, the paper adds to the critical scholarly discussion on sustainability. Practically, the study seeks to help companies avoid over- or under-communication of their sustainability achievement and encourages them to develop stakeholders' knowledge and influence legitimate practices actively.

We build an analytical model of greenwashing and derive a firm's decisions to improve its social and environmental impacts (SEI) as well as communicate about them to the public. We analyze the impact of external pressure on the firm, its supply chain visibility, and lack of public trust in such communications on the firm's decisions, and on the incidence and magnitude of greenwashing. We uncover several interesting insights which are relevant for firms and external entities like regulatory authorities and sustainability activists. We also derive a parameter that we call the 'mistrust risk' and demonstrate its importance for firms to decide an appropriate strategy for communicating their SEI to the public. A key finding of our paper is that greenwashing cannot be reduced just by increasing external pressure on firms. We also find that firms should be allowed to showcase any verifiable initiatives that they undertake for improving their SEI. Both these findings defy common intuition and practice. Furthermore, we make a strong case for external entities to try to understand firms' intent to greenwash rather than just penalizing them for greenwashing.

While corporate civil liability for damages is not a novel concept in national law, it is not yet clear how it relates to the corporate human rights due diligence duty in the recent EU Corporate Sustainability Due Diligence Directive (CSDDD). To contribute to filling this gap, this article discusses the human rights due diligence duty under the scope of civil law duties in continental and common law jurisdictions. Consequently, it examines the impact of the EU human rights due diligence duty on the parent-subsidiary corporation relationship and the responsibility of the former for the torts of the latter. Arguing for a stricter liability regime between the parent and the subsidiary, the article concludes by discussing the effects of the EU Directive on the company law concept of separate personality.

This study investigates whether part-time employees improve firm-level ESG (i.e., environmental, social, and governance) performance. Combining complementary views from role and issue-selling theory, we theorize that the temporal structure of part-time arrangements may be driven by a part-time employee’s prosocial motives, which include a greater emphasis on non-work responsibilities (e.g., caregiving and responsibility for others). Moreover, this identity linked to prosociality might induce a corresponding issue-selling behavior at the workplace since part-time employees might push for more responsible conduct from their employer. We develop and test this theoretical prediction using a three-studies design. Study 1 finds that part-time employees are more prosocially inclined than their peers, as evidenced by higher social value orientation scale values. Study 2 applies BERT topic modeling to a large sample of Glassdoor employee reviews and reveals that part-time employees address ESG issues more frequently in their reviews than their full-time counterparts. Study 3 provides macro-level evidence that firms with more part-time employees exhibit better ESG performance. We mitigate endogeneity concerns using the coefficient stability test by Oster (2019), the staggered adoption of the Affordable Care Act, and occupation-specific effects of part time employees.

A growing literature considers the role of workers’ personal politics in driving organizational outcomes. Prior work has measured the distribution of workers’ personal politics within employers using political donations. In this paper, we introduce an alternative measure, VRscores, which we construct by linking US voter registrations with online worker profiles. We show that VRscores capture a significantly larger and more representative population of employees and employers. VRscores and donations-based measures are only moderately correlated and differ in their classification of the political lean of a given workplaces for nearly one in four public companies. We describe various applications of VRscores for strategy and management scholars as well as social scientists more broadly.

Brands are important in transitioning consumer habits and, consequently, making our society a more sustainable one. Sustainability has become an important consideration when consumers and other stakeholders award their votes (e.g., through consumption and employment) to brands. However, brands may experience difficulties when implementing new features, such as sustainability, into their brand image. Brand incongruence can emerge when new information deviates from consumers' expectations. How sustainability may lead to such incongruence is the focus of this study, which investigates the potential (in)congruence of sustainability for brands based on the concept of brand personality. The results of the quantitative survey (n=11,110) illustrate that all five brand personalities (sincerity, excitement, competence, sophistication, and ruggedness) have the potential to embed sustainability into their brand image. The findings of this study lay the groundwork for further research on the critical issue of sustainability and branding and may encourage brand leaders to embed sustainability into brand strategies without fear of brand incongruence.

Despite the widespread belief that inclusion in prominent rankings benefits firms, emerging research suggests that marginal inclusion may at times have unintended negative consequences. Replicating and extending Lewis and Carlos (2023), who document negative effects for firms barely included in the 100 Best Corporate Citizens list, we examine how marginal inclusion in the Fortune 500 ranking influences evaluations by key stakeholders. Through a quasi-replication of the Lewis and Carlos (2023) study, we find supporting evidence that firms ranked near the bottom of the list experienced negative external evaluations, not only from investors but also from industry peers. We develop a theoretical explanation for these effects, emphasizing changes in evaluators’ comparison sets and the conflation of ranking criteria with overall quality. Our study also contributes to research on corporate social responsibility (CSR) by showing how recognition in rankings may shape stakeholder perceptions of firms’ social and financial performance.

The voluntary carbon market has emerged as a promising mechanism for organizations to offset emissions through purchasing carbon credits from dedicated emission reduction projects. However, media investigations have exposed pervasive quality issues with certain carbon credit projects. While negative media scrutiny has contributed to stark decline in demand for carbon credits, the effect on carbon credit supply remains less understood. This paper examines how media scrutiny on specific carbon credit projects in the forestry sector, verified by Verra – the largest carbon credit registry – spilled over to the supply decisions of other carbon credit projects. We conceptualize carbon credit projects’ decisions to increase or decrease carbon credit supply as navigating the tension between stigmatization and competition-induced substitution effects. Using a ten-year panel dataset of over 10,000 carbon credit projects, we investigate spillover effects across two categories: the registry and the sector. We find that Verra-verified forestry projects reduced supply, while forestry projects in other registries increased supply. Non-forestry projects, even those verified by Verra, were largely unaffected. This study contributes to the literature on voluntary carbon markets and spillover effects by highlighting the heterogeneous supply-side responses to public scrutiny.

This study examines how organizations respond to conflicting evaluations from multiple intermediaries. While prior research suggests that conflicting assessments might dilute the influence of any single system, we argue they can intensify reactivity by creating reputational dissonance—uncertainty stemming from inconsistent evaluations. Organizations facing such dissonance are more likely to act to reduce discrepancies, driven by concerns about stakeholder confidence in their positive reputation. This effect is stronger for organizations (a) dependent on intermediary audiences for key resources and (b) when peers receive consistently positive ratings, increasing reputational contrast. Our empirical setting focuses on ESG ratings, examining the early interaction between KLD and Innovest. Results show that firms with favorable prior KLD ratings reduce toxic emissions more significantly in response to unfavorable Innovest ratings. This effect is amplified for firms dependent on financial investors, Innovest’s key audience, and when peers receive favorable Innovest ratings. These findings contribute to the literature on reactivity, highlight how new intermediaries gain traction by challenging established reputations, and raise concerns about the proliferation of ESG ratings diluting their collective influence.

This study investigates the impact of public pressure and information disclosure on the adoption of environmentally friendly technologies, specifically focusing on the use of chemicals in hydraulic fracturing (fracking) in the US. Utilizing a dataset that includes both publicly traded and privately held firms, we explore how these entities respond differently to regulatory pressures and public scrutiny, particularly in the context of the use of toxic chemicals. Our analysis reveals that public firms, which are subject to greater external scrutiny from shareholders and the public, are more likely to reduce their reliance on toxic chemicals and trade secret claims when faced with increased public pressure. In contrast, private firms tend to increase trade secret claims, potentially as a strategy to conceal toxic chemicals, especially under heightened regulatory risks. The study further examines the effects of the 2016 U.S. presidential election as an exogenous shock, highlighting a shift in private firms’ behavior in response to perceived regulatory leniency under the Trump administration. Our findings underscore the complex interplay between public pressure, regulatory environments, and firm heterogeneity in shaping corporate environmental strategies, with implications for policy design and the effectiveness of information disclosure as a tool for directed technical change.

We conducted a study of the environmental movement, from its conservation beginnings in 1892 to present-day, to explain how marketization impacts social movements’ interactions across issues. Analyzing data from historical and contemporary archives, we use both qualitative and quantitative methods to reveal marketization as a key differentiator between the relatively more market-driven environmental movement and the environmental justice movement rooted in social justice. Resource imbalances between marketized and community-based movements trigger social categorization processes, delimitating organizational identity boundaries that become first-order interpretive frames shaping cross-issue engagement. Rather than collaborating in a broader social movement exchange field, organizations engage in interstitial negotiations from within the bounds of the marketized movements’ identities. In doing so, a third tangential field emerges because the dominant field defines it with a constitutive rule grounded in identity. This research contributes research on social movement theory by unveiling how marketization is reliant on and fueled by organizational identity, and how it can subsequently obfuscate the intentions and goals of even the most well-intended actors. It also contributes to research on institutional field emergence, by reconceptualizing interstitial negotiations through a lens of power

Prior work analyzing social movements’ target selection has emphasized firm characteristics, such as status, reputation, and social responsibility, that enhance attention to the activists’ cause. However, the production of targets by a movement is not a one-shot game. We posit that after an initial attack, the visibility of the activist and the resonance of their frames drive further mobilization. By casting a firm in resonant storylines, a visible activist shines a vilifying spotlight that others follow. We test our theory in the context of the ESG countermovement. We combine scraped media-based data on activist targeting of firms between 2019 and 2023 with data on firm characteristics, activist visibility, and trending topics in traditional and social media. We observe that, rather than being a “bottom-up” movement led by grassroots efforts, the ESG countermovement is predominantly driven by political elites. While firm characteristics drive the initial selection of targets, subsequent targeting is driven by the visibility of the initial activist and whether they linked the target and its ESG practices to resonant societal frames with negative sentiment. Our work offers a more complete model of target production by emphasizing activist visibility and frame resonance, explaining the persistence of activism against corporate targets.

Companies in various industries are under growing pressure to assess the costs of decarbonizing their operations. This paper develops a generic abatement cost concept to identify the cost-efficient combination of technological and operational changes firms would need to implement to drastically reduce greenhouse gas emissions from current production processes. The abatement cost curves resulting from our framework further serve as a decision tool for managers to determine the optimal abatement levels in the presence of environmental regulations, such as carbon pricing. We calibrate our model in the context of European cement producers that must obtain emission permits under the European Emission Trading System (EU ETS). We find that a price of €85 per ton of carbon dioxide (CO2), as observed on average in 2023 under the EU ETS, incentivizes firms to reduce their annual direct emissions by about one-third relative to the status quo. Yet, this willingness to abate emissions increases sharply if carbon prices were to rise above the €100 per ton of CO2 benchmark.

Sustainable finance is criticized for its limited capacity to deliver systemic societal impact. Existing research has primarily focused on interactions between investors and companies, neglecting investment firms' internal governance and organizational characteristics. This paper examines how investment organizations can be structured to achieve financial and societal goals systematically by studying the upstream interactions between asset managers and asset owners. We build on a longitudinal case study of a private equity impact fund focused on environmental transitions approached through ethnography, interviews, and archival data. Our findings highlight the critical role of the fund's organizational architecture—encompassing value-creation objectives, operational resources, and governance mechanisms—which is determined before its active life on the market. This architecture shapes the behavior of the asset manager throughout the fund’s lifecycle. We also show how hybridizing the organizational architecture by integrating elements from financial and environmental logics can foster subsequent investment and monitoring practices geared toward systemic impact, by driving alignment between financial and environmental. By uncovering the upstream organizational mechanisms determining investors' behavior in the financial markets, this research contributes to the literature on sustainable finance and corporate governance and calls for increased transparency and disclosure of the key characteristics of investment organizations' architecture.

Climate change is a pressing grand challenge, but it remains unclear whether institutional investors can use normative forces to direct firms toward decarbonization. Using the institutional logics perspective to study the impact of Pope Francis’s environmental encyclical in 2015, we theorize and find that the normative legitimacy of environmental logic, as induced by religious logic, allow Christian investment funds to go beyond instrumental calculations and engage portfolio firms in reducing carbon emissions. We analyze firms from 27 countries in the surrounding window of 2012 to 2019 with a difference-in-differences design and find that firms with Christian fund ownership reduce their carbon emissions 1.09 million tons more than those without such ownership. This effect is more pronounced when the Christian funds are more committed to Christian religious logic. This effect is also stronger when the firms’ decarbonization practices are oriented toward environmental logic as an end rather than a means, as demonstrated by offering sustainability incentives to executives, and weaker when firms’ existing decarbonization practices are oriented toward environmental logic as a means rather than an end, as evidenced by carbon emissions trading. Our study contributes to research on institutional complexity and decarbonization.

To fill knowledge gaps on alignment versus decoupling between public actions and private lobbying behavior, we provide some of the first evidence on of this phenomenon in the context of corporate lobbying positions on climate policy, using voluntarily-disclosed lobbying positions of over 3,000 corporations on climate policies in 125 countries during 2010-2023. We examine which firms are more likely to disclose their lobbying activity; to engage in a greater amount of lobbying activity; to support climate policy; and the relationship between CSR and support for climate policy. We find that larger emitters, firms with more decarbonization initiatives, and firms located in countries with greater disclosure pressure are more likely to disclose. We find a U-shaped relationship between emissions and lobbying frequency, and a monotonic relationship between emissions and number of lobbying mechanisms used. Firms are more likely to support climate policy if they have lower GHG emissions and implement more decarbonization efforts, suggesting that decoupling is not the norm. Firms in extractive industries such as mining, oil and electric utilities are the most engaged in opposing climate policy. We find significant variation in corporate support for climate policy depending upon the nature of particular policy types.

This research investigates how indigenous knowledge, and practices offer crucial insights into reshaping supply chains and advancing toward a sustainable, post-growth era. In framing the existing literature on supply chains and indigenous knowledge around the Brazil nut production system, we aim to explore the following questions: How can supply chains be reimagined to support sustainable practices and equitable governance in a post-growth era? How do indigenous knowledge systems shape regenerative supply chain models for a post-growth future? By adopting an ethnographic approach methodology, the study draws on immersive fieldwork in the Amazon rainforest, including interviews, participatory workshops, and documentary analysis, to examine three layers of "encapsulation": the forest relationship, cooperative structure, and market contracts. These layers reveal the interplay between governance systems, indigenous ways of organising, and external market dynamics applied to the Brazil nut supply chain. The Paiter Suruí cooperative exemplifies a governance model that balances ecological preservation with market participation. The study contributes to supply chain literature by introducing the concept of "polyrhythmic governance," emphasising the integration of diverse knowledge systems. It underscores the need for equitable frameworks that respect indigenous agency, offering pathways for sustainable and inclusive economic practices in a post-growth era.

Research on organizational responses to stakeholder pressure often assumes organizations choose either symbolic or substantive responses. This study challenges this either-or perspective by exploring the sequential nature of responses. Organizations may first adopt visible policies to acknowledge stakeholder issues and later implement them, suggesting responses can unfold in phases over time. Sequential responses—and the time between adoption and implementation—stem from challenges organizations face when implementing policies. Drawing on the literature on policy implementation and the resource-based view of the firm, we develop a theoretical framework around the capabilities and constraints influencing the timely implementation of adopted policies. Using 13 years of data on U.S. firms’ responses to stakeholder pressure around consumer health and safety, we find that structural implementation capacities increase the likelihood of timely policy implementation, while attentional constraints reduce it. Our findings extend research on decoupling and organizational responsiveness by reconsidering what are often labeled as symbolic responses. We highlight the phased nature of responses and introduce new mechanisms driving substantive organizational action. This work provides a nuanced perspective on organizational behavior, emphasizing the importance of implementation challenges and capacities in bridging the gap between policy adoption and meaningful action.

Do firms take more action to mitigate their impact on climate change when facing heightened climate risks? This study examines the relationship between climate risks—encompassing both physical and transition risks—and corporate climate change mitigation strategies. Using data on forecasted climate risks, climate targets, and greenhouse gas emissions of U.S. public companies, we find that firms exposed to greater physical and transition climate risks are less likely make substantial mitigation efforts. We further explore the underlying mechanisms. Firms exposed to greater physical climate risks are more inclined to pursue adaptation strategies, which may divert resources away from mitigation. Meanwhile, firms facing higher transition climate risks are more likely to adopt anti-climate political strategies rather than make mitigation efforts. These firms also show a greater tendency toward low-carbon innovation.

This paper provides the first rigorous assessment of the financial sectors’ resilience to biodiversity transition risk. We provide “bottom-up” stress tests using comprehensive

euro-area credit registry data and a market-based “top-down” stress test based on

banks’ stock return sensitivities to biodiversity risk. Industries exposed to biodiver-

sity transition risk account for approximately 15% of total bank credit to non-financial

firms, compared to about 25% for climate-exposed industries. Stress test scenarios

indicate that even under severe conditions, additional losses in biodiversity-exposed

industries would constitute only 0.3 to 0.5% of the financial system’s corporate loan

portfolio. A top-down market-based approach yields similar results with capital short-

falls following a biodiversity shock peaking at 0.5% of banks’ market capitalization.

These results suggest that biodiversity transition risks currently pose only a moderate

threat to financial stability

We study how holdings by investors who consider environmental, social, and governance (ESG) issues when formulating investment decisions affect market efficiency. We find that a higher level of socially responsible institutional ownership (SRIO) results in a lower level of stock price informativeness, measured by the future earnings response coefficient. Using an exogenous shock to SRIO, we show that this relationship is causal. Due to their ESG preferences, socially responsible institutions (SRIs) place less weight on earnings information and thus hinder the incorporation of future earnings information into stock prices. In contrast, they place more weight on ESG information. Correspondingly, the market reaction to earnings news weakens as SRI holdings increase, and vice versa for ESG news. We rule out various alternative explanations such as 1) SRIs are less skilled than their counterpart institutions in processing financial information, 2) firms provide less financial information in response to increased SRIO, or 3) firms’ general information environment is changed due to change in ownership composition. Overall, our findings suggest that ESG information increases investors’ information processing costs and hampers stock market efficiency in incorporating future earnings information.

Environmental, social, and governance (ESG) rating ambiguity, defined as the divergence of ESG ratings across different agencies, is often considered a problem for ESG investors, because extant research assumes that investors use ratings for evaluation purposes and rating ambiguity makes stocks hard to evaluate. We extend this literature by theorizing how ESG investors can take advantage of ESG rating ambiguity to rationalize controversial investment decisions so that these decisions can appear simultaneously congruent with incompatible institutional demands from the financial logic and the social logic inherent in ESG investing. We analyze a panel dataset comprising 7,248 firms across 67 countries between 2006 and 2021, focusing on green stocks and sin stocks that exemplify incompatible institutional demands. We find that ESG rating ambiguity increases ESG ownership in sin stocks and decreases ESG ownership in green stocks. Our findings remain, using a difference-in-differences analysis based on a regulatory shock, addressing the alternative explanation (i.e., investors use financial returns as a non-ambiguous criterion) and using different measures and rating coverage.

Corporate campaign contributions can enhance firm performance by securing lobbying access to recipient politicians but may also incidentally advance controversial sociopolitical causes peripheral to firm performance that these politicians champion. This paper examines how employees shape firms’ decisions to navigate the trade-off between advancing regulatory interests and mitigating the unintended social impact of corporate campaign contributions. Using the context of the January 6, 2021, U.S. Capitol Insurrection, we analyze how employees’ political leanings influenced U.S. public companies’ decisions to halt campaign contributions to Members of Congress who objected to certifying the 2020 presidential election results (“Objectors”). Firms with employees who supported pro-certification legislators significantly reduced contributions to Objectors following the Insurrection. These reductions constrained firms’ ability to lobby Objectors, even when the latter wield outsized power over firms’ regulatory interests, and were particularly pronounced when employees could easily monitor corporate political spending.

Extant research has overlooked why companies receive varying levels of criticism for not engaging with polarized social issues. Further, little is known about the consequences of engaging with these issues in the face of criticism. To understand which firms are at the highest risk of missteps, we integrate insight from expectations management and identity theory. We argue that external criticism stems from general audiences’ expectations being left unmet. These expectations have two dimensions: predictive, reflecting audiences’ perceptions of the likelihood a firm will engage based on past actions and related cues; and prescriptive, based on their beliefs as to whether a firm has a moral obligation to respond. We further posit that responding to a polarized issue in the face of criticism can backfire, eliciting greater and increasingly bipartisan critique. An empirical analysis of criticism for silence and subsequent corporate responses to a controversial voting law in Georgia supports these arguments. In this context, prescriptive and predictive expectations interacted to lead to mostly Democratic-leaning critique. Firms that subsequently broke their silence received both Democratic- and Republican-leaning criticism afterwards. Post-hoc analyses revealed that early (prior to a buildup of critique) and substantive (vs. symbolic) engagement was associated with less criticism.

A growing body of research considers how consumers react when companies become aligned with a stance on a polarized sociopolitical issue. Prior studies of individual responses have examined customer reactions to specific companies supporting a particular side of a given issue. However, no study has examined whether the resulting reactions may differ depending upon the side the company supports. This may limit the generalizability of these findings, especially because sociopolitical alignment tends to be disproportionately carried out by a small number of companies and predominantly in support of left-wing positions on a small number of issues. We thus provide the first evidence on how customers react to corporate alignment on different sides of the same issue. We do this with two experiments involving well-known real-world companies (Bud Light and McDonald’s) which simultaneously were aligned with different stances on two controversial issues (transgender rights and Israel-Palestine). We find asymmetrically negative effects of sociopolitical alignment on customers: consumers react negatively when a company supports the opposing side but do not react positively when it supports the side they prefer. While the direction of consumer reactions are asymmetrically negative, this effect is symmetric across opposing stances on the same issue.

We examine the joint effects of shareholder engagement—coordinated as part of the Climate Action 100+ (CA100+) initiative—and governmental climate regulation on firms’ carbon emissions intensity. Our theory and findings support the standalone effects of firms’ voluntary responses to investor pressure and mandatory pressure from climate regulation. Notably, we find that these two forms of pressure are complementary, with firms facing both shareholder engagement and regulatory pressure reducing their subsequent emissions intensity on average. Furthermore, we test and find supportive evidence for spillover effects arising from board ties between firms targeted by CA100+ and connected non-targeted firms, which are likewise reinforced by the prevalence of government climate regulatory pressures. By demonstrating the additive effects of these different sources of pressure on firms’ environmental impacts, we contribute to the corporate governance and stakeholder literatures, while also recognizing the complexity of normative pressures and interrelationships between actors that are key contributors to climate-related challenges and solutions.

We present novel evidence on how environmental and social (E&S) incidents affect the capital-raising ability of Private Equity (PE) firms. PE firms with E&S incidents in portfolio companies are less likely to fundraise and raise smaller subsequent funds. The decrease in capital commitment does not seem related to fund performance; instead, it is driven by E&S concerns of relationship limited partners (LPs). LPs trade off E&S concerns with financial cost of breaking relationships, implying a weaker impact on large, top-performing PE firms. The threat of “exit” by E&S-concerned investors incentivizes PE firms to exert “voice” and mitigate negative E&S externalities.

This paper examines the impact of immigrant entrepreneurship status and political clientelism on attracting attention from state legislators—key public resource providers. We conduct a field experiment with 6,734 state legislators across the US. Each legislator received an email with identical content from an entrepreneur asking for help with hiring. We randomized entrepreneurs’ immigrant status (1st or 3rd Generation American) and political constituency (inside or outside the legislator’s constituency). Thus, each legislator was randomly assigned to one of the four arms: (a) Arm 1: 3rd Generation American Inside Legislator Constituency, (b) Arm 2: 3rd Generation American Outside Legislator Constituency, (c) Arm 3: 1st Generation American Inside Legislator Constituency, (d) Arm 4: 1st Generation American Outside Legislator Constituency. We find that legislators allocate their attention unequally: reply rates for immigrant entrepreneurs (1st Generation American) are substantially lower than for nonimmigrant entrepreneurs (3rd Generation American). Importantly, we find that the difference between legislator reply rates for immigrant and nonimmigrant entrepreneurs is higher within the legislators’ constituency but negligible outside it. The relative difference is larger for Republican legislators and smaller in states with more immigrant eligible voters. State’s startup job creation, immigrant educational attainment, and racial composition influence the relative differential.

Sustainability scholars have traditionally focussed on global and national governance spheres, but the increase of “localism” means that subnational governments and local governance—including local businesses—are also becoming an integral part of these systems. Drawing on an ethnographic case study of a rural county in the South-West of England, we examine how the concept of place impacts local sustainability governance. We contribute by: (1) demonstrating how local sustainability governance is part of broader multilevel governance systems, in which governance divisions happens along place-based lines rather than public-private spheres; (2) theorising how local sustainability governance is different because of its “local pragmatist” approach, emphasizing problem-solving, deliberation, creative action, and experimentation between local businesses, governments and civil society; and (3) explaining how local sustainability governance can alters the initial ‘sense of place’ through collective place-forming, bridging insights from geography studies. Our contributions help to complete the picture of sustainability governance and sketches an alternative, place-based governance system to enhance the resilience of societies and economies in the face of sustainability challenges.

This paper examines the effects of environmental transparency and enforcement regulation on the sourcing patterns of commodity trading firms (i.e., firms that source commodities from producers and distribute them downstream). By exploiting Brazil's priority regulation targeting producers in deforestation-intense municipalities, I find trading firms do not reallocate their sourcing from regulated to unregulated locations. However, treated trading firms reduce their exposure to deforestation and CO2 emissions associated with their sourcing in both regulated and unregulated locations relative to control firms. Although the effect in regulated locations could reflect the first-order responses by producers, the positive spillover effect in unregulated locations suggests trading firms respond to upstream production shocks and enhance the sustainability of their firm-wide sourcing activities. Importantly, (i) local enforcement actions and (ii) voluntary commitments to zero-deforestation sourcing and third-party audits appear to be crucial factors in altering trading firms' behavior and thereby enhancing the sustainability of commodity sourcing.

Organizations addressing grand challenges at scale must intervene in a way that is sensitive to institutionally diverse contexts to effect enduring change. How do they develop capabilities to conduct enduring place-based intervention work repeatedly across contexts and over time? The organization we studied addressed poverty via inclusive finance in lower and middle income countries, developing four interrelated capabilities for scaling place-based intervention work: contextualizing, field building, practice embedding and norm changing. Examining its 50-year trajectory, we identified a capability development process, involving reflective learning and knowledge circulation leading to capability scope and locus expansion over time, which led to expanded intervention work. Our findings on place-based intervention work contribute theoretically and practically to addressing grand challenges and introduce a new line of research on capabilities for institutional work, building a process model of their development and expansion over time.

Hype, or the collective vision of a promising future, is both an opportunity and a risk for emerging ventures, technologies, and industries. While it mobilizes resources, public interest, and institutional support, the inevitable decline of hype—into the "trough of disillusionment"—often leads to resource withdrawal, venture failures, and stalled industry growth. Focusing on the UK's ocean energy industry, particularly wave and tidal technologies, from 2000 to 2024, we identify three distinct phases: 1) peak hype around wave technology (2000–2011), 2) disillusionment and venture collapse (2012–2017), and 3) a resurgence driven by tidal technology (2018–2024). Our findings reveal that ventures initially benefit from associating with hyped sectors but later may dissociate to avoid negative consequences. We develop a theoretical framework explaining how entrepreneurial identification with different market categories can foster resilience during hype cycles, offering practical strategies for entrepreneurs to leverage hype while mitigating its risks. This research contributes to understanding the evolution of nascent industries through cycles of excitement and skepticism.

Ventures founded by women (versus men) face significant funding disparities, largely due to gender bias. Research suggests that this penalty may be mitigated in stereotypically feminine industries, where women are perceived as having more expertise. However, I argue that under certain conditions, this perceived expertise may paradoxically be associated with further penalization. When founders address social issues pertinent to their own disadvantaged group—a situation I refer to as identity-issue fit—investors may attribute ideological rather than economic motives to ventures, leading to concerns about the prioritization of societal over financial goals. Consequently, ventures founded by entrepreneurs with (versus without) identity-issue fit are likely to raise less capital than similar ventures. Consistent with my core argument, I further theorize that penalization intensifies when entrepreneurs engage in advocacy, and diminishes when the addressed issue gains public salience. I test these hypotheses using data from 2010-2024 on venture-backed Femtech companies in the U.S., the UK, and Canada focused on women’s health issues. The findings support my predictions and align with the proposed mechanism. This paper contributes to our understanding of the barriers faced by founders from disadvantaged groups and introduces a new mechanism through which ideology may influence key audiences’ evaluations of organizations.

We investigate the effects of communication framing on necessity entrepreneurs’ participation in corporate-sponsored training programs. Necessity entrepreneurs (who start businesses for sustenance amidst a lack of alternative employment opportunities) play a critical role in alleviating poverty and fostering regional economic growth, especially in emerging economies. Companies often offer training programs to support these entrepreneurs as part of their corporate social responsibility (CSR) efforts. However, these programs frequently suffer from low participation, thus diminishing their potential to help the intended beneficiaries. Utilizing regulatory focus theory, we investigate whether promotion-framed messages (emphasizing growth and advancement) or prevention-framed messages (emphasizing security and safety) are more effective in encouraging participation. We conduct two randomized field experiments embedded in corporate-sponsored entrepreneurial training programs involving 5,773 necessity entrepreneurs in Peru. We find that promotion-framed messages lead to higher participation rates than prevention-framed messages. Our study contributes to the entrepreneurship literature by demonstrating how communication framing affects necessity entrepreneurs’ engagement with training programs. We also extend the CSR literature by showing that communication nudges based on regulatory focus can enhance beneficiary engagement. Additionally, our findings have practical implications for organizations designing training programs aimed at empowering necessity entrepreneurs.

This paper contributes to research on nonmarket strategy and legitimacy maintenance in contexts of weak state capacity by showing how one of the world’s largest mining firms struggled to maintain legitimacy in local communities after legitimation through nonmarket activity. Based on data collected during nine months of fieldwork in Peru’s mining industry, the article advances a theoretical model of a legitimation trap. The model encapsulates how the delivery of public goods and services to community stakeholders as nonmarket strategy raised stakeholder expectations for more nonmarket activity, forcing the firm to sustain nonmarket activity solely to maintain legitimacy and avoid community opposition. The paper also shows how the private delivery of public goods and services instead of the state eroded state legitimacy in terms of public goods and services delivery in the communities, increasing legitimacy maintenance pressure on the firm. These findings have implications for how we study firms operating in contexts of low state capacity, and what roles firms can sustainably play instead of states.

Although sustainability certifications are widespread, the challenges confronting the sustainability certification organizations (SCOs) who develop, promote and administer such certifications have received less attention. We argue that SCOs face three task domains: legitimacy management, organizational learning, and stakeholder engagement. Critically, these domains are interdependent; a preoccupation with one domain poses limitations on the others. First, an emphasis on legitimacy management can inhibit organizational learning, leading to the advocacy trap. Second, an emphasis on stakeholder engagement can inhibit learning processes, leading to the inertia trap. Third, an emphasis on legitimacy management can inhibit stakeholder engagement, leading to the mobilization trap. Collectively, these challenges constitute the trap triangle. Building on our theoretical model, we develop propositions about how SCOs fall into these traps and how they can overcome them. Finally, recognizing SCOs vary in terms of their movement, market or mission orientations leads to propositions about the traps each type of SCO is most likely to fall into. We close the article by discussing our contributions to the literature on sustainability certifications and environmental governance.

Issue fields are dynamic arenas where actors converge to address shared issues, seek- ing consensus through field settlements established by public or private actors at local or global levels. In fields tackling grand challenges like climate change, global settlements are often advocated to harmonize efforts across jurisdictions. While prior research has explored settlement constellations and field evolution, we know surprisingly little about how global settlements shape the emergence and trajectory of issue fields. Drawing on a historical study of the carbon offsetting field, we examine how the Clean Devel- opment Mechanism (CDM) catalysed the field’s emergence by providing foundational structures and legitimacy while also triggering fragmentation, governance gaps, and field de-legitimation. We highlight how governance mechanisms were adapted to these challenges, ultimately driving settlement convergence and field stabilization. By doing so, we advance our understanding of global settlements as both enablers and disrup- tors, showing how they foster legitimacy and practices while simultaneously fuelling fragmentation, reshaping fields, and their ability to address grand challenges.