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Why do companies obtain the B corporation certification?

Author

Listed:
  • Maretno Harjoto
  • Indrarini Laksmana
  • Ya-wen Yang
Abstract
Purpose - This study identifies the factors that influence companies to obtain the B corporation certification. Drawing from institutional isomorphism, gender socialization theory, the ethics of care and social identity theory, the authors examine the impact of geographic locality, product market competitions and owners’ demographic characteristics on a firm’s decision to be a certified B Corporation. Design/methodology/approach - Using two sets of data, a hand-collected sample of 743 small businesses receiving a B Corporation certification between 2007 and 2014 and a sample of 902 firms participating in a B Lab survey from 2011 to 2013, the authors examine factors that influence firms’ decision to obtain the B Corporation and their environment, social and governance (ESG) performance. Findings - Firms in states that are democratic-leaning, have a lower hourly wage rate or have a greater religious population are more likely to be early adopters and leaders of the B Corporation movement than those in other states. On average, states with a higher unemployment rate and more democratic-leaning voters have more B Corporation certified firms in each year and over the years. Additionally, product market competition is positively associated with firms’ likelihood of obtaining B Corporation certification and their ESG scores. Practical implications - This study brings new insights to the understanding of purpose-driven enterprises and factors that influence firms’ decision to go through the B Corporation verification and certification process. Originality/value - This study establishes a theoretical foundation that becoming a B Corporation is a corporate social responsibility (CSR) action and shows that existing theories explaining the factors motivating companies to engage in CSR can also be applied to explain firms’ motivation to become B Corporations.

Suggested Citation

  • Maretno Harjoto & Indrarini Laksmana & Ya-wen Yang, 2018. "Why do companies obtain the B corporation certification?," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 15(5), pages 621-639, December.
    • Handle: RePEc:eme:srjpps:srj-07-2018-0170
    DOI: 10.1108/SRJ-07-2018-0170
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    Citations

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    Cited by:

    1. Elsa Diez-Busto & Lidia Sanchez-Ruiz & Ana Fernandez-Laviada, 2021. "The B Corp Movement: A Systematic Literature Review," Sustainability, MDPI, vol. 13(5), pages 1-17, February.
    2. Lidia Sanchez-Ruiz & Beatriz Blanco & Juan A. Marin-Garcia & Elsa Diez-Busto, 2020. "Scoping Review of Kaizen and Green Practices: State of the Art and Future Directions," IJERPH, MDPI, vol. 17(21), pages 1-19, November.
    3. Valerie Paelman & Philippe Van Cauwenberge & Heidi Vander Bauwhede, 2021. "The Impact of B Corp Certification on Growth," Sustainability, MDPI, vol. 13(13), pages 1-16, June.
    4. Ronald Weber Kirst & Miriam Borchardt & Maurício Nunes Macedo de Carvalho & Giancarlo Medeiros Pereira, 2021. "Best of the world or better for the world? A systematic literature review on benefit corporations and certified B corporations contribution to sustainable development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1822-1839, November.
    5. Mara Del Baldo & Federica Palazzi, 2023. "High-Growth Benefit Corporations: Leveraging on Intangibles—Insights from Italy," Sustainability, MDPI, vol. 15(14), pages 1-20, July.

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