Approaching gain or avoiding loss? The impact of CEO regulatory focus and dynamism on CSR

Despite the increasing attention to factors leading to corporate social responsibility (CSR), surprisingly little research has examined the roles of key decision maker's psychological traits. Thus, this study specifically examines the effects of CEO's regulatory focus (promotion vs. prevention) on CSR. Given that CSR is an outcome-uncertain investment requiring risk taking, we propose that CEOs with promotion focus are more likely to engage in CSR, whereas CEOs with prevention focus are less likely to engage in CSR. We further propose that such relationships will be stronger in conditions of high dynamism, under which any corporate investment could result in either big gains or big losses. Using a panel sample of U.S. firms for the years 2005 to 2011, we found that CEOs with promotion focus are more active in CSR engagement when there are high levels of industry- and firm-level dynamism. However, we did not find any moderating effects of dynamism on a CEO's prevention focus and CSR.