We examine the impact of sales order backlog, an important leading indicator of firm performance, on corporate social responsibility (CSR) performance (measured as responsible and irresponsible CSR performance). We rely on the stakeholder view and the resource availability view of CSR to develop our hypotheses. Under the stakeholder view, we posit a positive relation between sales order backlog and CSR performance. Under the resource availability view, we posit this relationship to be negative. Our empirical evidence shows a significant positive relation between order backlog and irresponsible CSR performance, suggesting that firms with higher order backlog demonstrate lower overall CSR performance. This evidence is consistent with the resource availability view that engaging in CSR activities consumes valuable firm resources (financial and human), and thus firms with limited resources are less likely to invest in CSR initiatives. Firms with high levels of unfulfilled sales orders must focus on fulfilling those orders, and may not be able to devote resources to CSR.
Published in Advances in Accounting in November 2019, Volume 47, page 100444.
Advances in Accounting