Relationship between Corporate Social Responsibility and employee wages

This research provides a new method to analyze the view on corporate social responsibility (CSR) by U.S. public companies between 2003 and 2011. Two views on CSR can be distinguished: shareholder maximization CSR and philanthropic CSR. The first view sees CSR as an instrument to create shareholder value and the second view claims that companies embrace CSR since they also care about their stakeholders and want to be a good corporate citizen. The idea is that the type of relationship between CSR and employee wages explains which view on CSR is supported. The regression analysis indicates a negative significant relationship between CSR and employee wages which suggests shareholder maximization CSR when including all sectors over the entire research period. In other words, companies with a higher level of CSR pay their employees less than companies with a lower level of CSR. They use CSR to reinforce their goal to create shareholder value and not because they care about their stakeholders. The negative relationship also holds when only concentrating on the financial sector separated from the other sectors. If the research period is split up in before and after the crisis the relationship remains negative before 2007 and the relationship is even stronger after 2007.