How to achieve sustainability in the era of digitalization: insights from corporate culture, social responsibility and corporate attributes

Abstract

Purpose This study aims to examine how a firm can achieve sustainability in the digital era through the impact of cultural values and firm attributes on firms’ social responsibility performance by using a panel of publicly listed US companies. Design/methodology/approach The study uses fixed effects models to investigate the influence of cultural values on a firm’s enagement in social responsibility and its corresponding effect on a firm’s sustainability. To address potential endogeneity concerns, the study uses a two-stage least squares approach with an instrumental variable analysis to establish the causal relationship. Findings The results demonstrate that a strong control culture may promote a firm increase its engagement in social responsibility activites. Interestingly, the study shows that create-oriented firms appear more inclined to intensify social responsibility activities by increasing their intangible capital, especially during the digitalization era. Additional analyses show that the link between culture and social responsibility may vary depending on various firm attributes including firm size, dividend policy, profitability and cash holdings. Importantly, the study provides evidence that control- and create-oriented firms continue to engage actively in social responsibility activities during crisis periods, whereas compete-oriented firms significantly reduce such engagement, consistent with their stronger focus on profit under adverse conditions. Lastly, the results suggest that control and create cultures appear the most favorable orientations, as they foster sustained social responsibility involvement while supporting long-term financial stability. Originality/value Overall, the findings offer valuable insights into how cultural values and social responsibility behaviors among firms may foster their sustainable development.