Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions

European Management Journal xxx (xxxx) xxx

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Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions Domenico Campa a, *, Evy Wilhelmina Anna Zijlmans b a b

International University of Monaco, INSEEC U Research Center, 2, Avenue Albert II, 98000, Principality of Monaco, Monaco Trinity College Dublin, College Green, Dublin 2, Ireland

a r t i c l e i n f o

a b s t r a c t

Article history: Received 1 July 2018 Received in revised form 14 January 2019 Accepted 17 January 2019 Available online xxx

This research investigates whether financial institutions that have gained a good reputation in relation to their CSR activities also engage in significant corporate support for the arts (CSA). Using a sample composed of the 42 largest listed European financial institutions, data from 2004 to 2013 (i.e., 420 firmyear observations) and manually collected CSA disclosure information, our findings indicate that entities rewarded for their CSR initiatives are also those that engage in significant CSA. We also find that CSA disclosure reported in the social reports of financial institutions is a predictor for the attainment of a CSR award, whereas that reported in annual reports is not. Our findings suggest that annual and social reports have a different informative relevance, at least in relation to CSR initiatives in the form of CSA, for the stakeholders of financial institutions. Thus, our results provide useful insights for companies’ communication strategies showing, for example, that social reports are the best channel to communicate about CSA. © 2019 Elsevier Ltd. All rights reserved.

Keywords: Corporate support for the arts Corporate social responsibility Corporate social responsibility awards Financial institutions

1. Introduction Banks and the arts are historically linked (Iqbal, 2009). The first bankers supporting the arts in the 1300s did so as a way to atone for the sin of having become rich because moneylending with interest was seen as a sin by the Christian religion at that time. Later, support for the arts was used to elevate the social status of bankers, as in the case of the Medici, who funded the arts as a way to obtain public prominence, power and, finally, noble status (Iqbal, 2009). Late in the last century, other objectives were identified as primary goals behind corporate support for the arts (hereafter CSA), broadly classified under two main labels of corporate social responsibility (hereafter CSR) relating to extrinsic and intrinsic motives: sponsorship and philanthropy (Adler, 2010).1 Distinguishing between sponsorship and philanthropy, however, no longer covers the arts and business relations that we observe today (Lewandowska, 2016).

* Corresponding author. E-mail addresses: [email protected] (D. Campa), [email protected] (E.W.A. Zijlmans). 1 The term “Corporate Support for the Arts” is found in LeClair and Gordon (2000). They link corporate support for the arts to firm-level activities aimed at supporting the “culture and the arts”, such as museums and historical societies, public television and radio, theatre, and support for local and regional symphonies (LeClair & Gordon, 2000, p. 227).

Indeed, also as a consequence of the decrease in public support for the arts following economic downturns (Nissley, 2010), the utilitarian approach has modified the way business and the arts interact, replacing the purely charitable approach of entities towards arts organizations, in a scenario where arts organizations are not just passive beneficiaries, but rather act as business partners (Holt, 2006; Lewandowska, 2016). The mixed motivations behind CSA are also shown by Moir and Taffler (2004) who found that the underlying drivers of CSA in companies are typically not purely altruistic, but rather valueenhancing, as is the case with the CSR initiatives of banks, which are based upon both extrinsic (i.e., strategic, greenwashing) and intrinsic (i.e., altruistic) drivers (Wu & Shen, 2013). In fact, engagement with the arts can enhance a corporate image (Schwaiger, Sarstedt, & Taylor, 2010) and improve employees' attitudes, creativity and efficiency (Iqbal, 2009; Lewandowska, 2015; Nissley, 2010). At the same time, however, D’Astous and Bitz (1995) show that CSA, in comparison with purely commercial sponsorships, is perceived as being less lucrative and believed to support community relations rather than marketing objectives, thus having a positive impact on the social perception of firms. Although the underlying motives for CSA vary greatly (LeClair & Gordon, 2000) and even if firms typically link these initiatives to a CSR philosophy, there is a paucity of research isolating and

https://doi.org/10.1016/j.emj.2019.01.003 0263-2373/© 2019 Elsevier Ltd. All rights reserved.

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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D. Campa, E.W.A. Zijlmans / European Management Journal xxx (xxxx) xxx

examining the specific relationship between CSR and CSA, especially among financial institutions. In fact, research on CSA in a business context is a relatively new element in a field of study which mainly examines general links between the arts and business (Lewandowska, 2016; Schiuma, 2011), corporate identity (Kottasz, Bennett, Savani, Mousley, & Ali-Choudhury, 2007) and corporate art collections (Behnke, 2007; Martorella, 1990). Additional research on the topic is indeed needed, also in light of the fact that CSA “is a special case [of CSR], where firms might, more legitimately, record their expenditure as sponsorship and put it under the advertising budget, rather than the community investment budget” (Moore, 1995, p. 176). With this statement, Moore (1995) effectively emphasizes how the peculiar nature of CSA may limit stakeholders’ ability to perceive these initiatives as CSR if compared with other actions like, for example, building a school or a water well in a developing country. Thus, having established that, nowadays, CSA is not driven exclusively by purely altruistic or purely commercial drivers, but by a mix of the two, the current exploratory study aims to analyse whether financial institutions that have a good reputation in relation to their CSR activities also include CSA in their CSR strategies. Accordingly, we explore whether the level of CSA engagement in financial institutions, measured by the amount of CSA disclosure in institutional reporting (i.e., annual and social reports), is a predictor for CSR recognition proxied by the attainment of a CSR award. Using a sample composed of the 42 largest listed European financial institutions, data from 2004 to 2013 (i.e., 420 firm-year observations) and manually collected CSA disclosure information, our findings indicate that entities in receipt of a CSR award are also those that engage in significant CSA. Moreover, we find that only CSA disclosed in the social reports of financial institutions is a predictor for the attainment of a CSR award while that declared in annual reports is not, suggesting that these documents have a different informative relevance, at least in relation to CSR initiatives in the form of CSA, for the stakeholders of financial institutions. Accordingly, our results provide useful insights for companies' communication strategies showing, for example, that social reports are the best channel to communicate CSA initiatives to stakeholders. They also shed light on financial institutions, neglected by previous research on the assumption that their inclusion in multisector studies introduces comparability issues because of the unique features of the financial services industry (Ntim & Soobaroyen, 2013). The results may encourage ‘arts-sensitive’ investors to target their investment decisions on institutions with recognized CSR initiatives because they are also those that are more likely to engage with CSA. Finally, the longitudinal time horizon provides researchers and practitioners with insights into the development of the CSR-CSA link within European financial institutions. 2. Literature review and hypothesis 2.1. Arts and business relations The intersection between the arts and business is an interesting domain of study, considering the non-rational nature of the arts and the rationality that is often associated with business (Bourdieu, 1977; Schiuma, 2011). The traditional principle of ‘art for art's sake’ assumes that arts institutions and artists should not be overly dependent on business if they are to be viewed as legitimate (Bourdieu, 1977). However, particularly as a consequence of financial crises and the ways in which these have impacted on government spending (Nissley, 2010), arts institutions have increasingly been forced to collaborate with businesses (Daellenbach, Thirkell, & Zander, 2013; Schwaiger et al., 2010; Seitanidi & Ryan, 2007), whilst

companies are increasingly anticipating the burgeoning interest in the arts by incorporating arts services into their internal structures (Deloitte, 2017; Schiuma, 2011). Originally, two drivers were identified in relation to CSA: idealistic or pragmatic motives. Idealistic motives are associated with one-way support for the arts, such as philanthropy, whereas pragmatic drivers are generally related to mutually beneficial partnerships and corporate sponsorship (Seitanidi & Ryan, 2007). Philanthropy can be explained as initiatives in the interests of others without any expectation of a return and inspired by a very strong focus on society (Moir & Taffler, 2004). Alternatively, initiatives with pragmatic underlying motives are seen as part of a company's marketing strategy to invest resources and expect a return (O'Hagan & Harvey, 2000). Sponsorship would then be a way for firms to improve their corporate image and reputation (Colbert, Nantel, & Poole, 1994) reaching current and potential customers through initiatives closer to their lifestyle and beliefs, rather than intruding on their life through classic TV or journal advertising (Kotler & Scheff, 1997). More recently, relationships between corporations and arts institutions have become more partnership-oriented (Lewandowska, 2016) and increasingly link CSA to broader social objectives to benefit society and, not least, to demonstrate corporate citizenship (Donia & Sirsly, 2016). We see the latter approach as a mix of both idealistic and pragmatic drivers, and most in line with the current focus of banks on CSA. For instance, Schwaiger et al. (2010) view enhancing likability as the main driver of a firm to engage in CSA and that the latter, in turn, is well-suited to enhancing the perception of a firm's social performance, provided that they are disclosed and reported continuously and clearly to its audiences. As a consequence, today, most authors dismiss the existence of purely idealistic or pragmatic motives behind CSA (Adler, 2010; Moir & Taffler, 2004) and, supporting this point of view, Moore (1995) states that CSA is a peculiar type of CSR action, which may also be seen as an expense for advertising, rather than being communicated as a community initiative. Accordingly, Lewandowska (2016) claims that the distinction between sponsorship and philanthropy no longer entirely encompasses the relationships between the arts and business. She states that classic forms of sponsorship are losing their impact on consumers, who, for example, no longer react significantly to corporate logos in arts events (Carrillat & D'Astous, 2012). Thus, since the turn of the century, there has been a shift towards a more partnershiporiented approach to cultural institutions (Lewandowska, 2016). Corporate entities do not merely finance events created and developed by arts organizations, but they become partners and exchange their know-how to jointly create events. This approach contributes to finding common values between business entities and arts institutions (Lund, 2010), generates mutual learning and creative inspiration (Preece, 2010), avoids interference between each other's activities, and increases the creative potential of business entities' employees (Lewandowska, 2016; Reaves & Green, 2010). When we look at CSA both as a means to achieve the creation of shared values and community emphasis, and as a form of marketing, then its relationship with CSR perhaps becomes clearer. Indeed, over the years, CSA has evolved from being the preference of a particular board member, towards more strategic, CSRintegrated initiatives (Adler, 2010; Daellenbach et al., 2013; Seitanidi & Ryan, 2007). Daellenbach et al. (2013) argue that all forms of arts support fall into the broader category of CSR initiatives given the exceptional nature of arts sponsorship, which goes beyond the frequently non-social nature of sponsorship in general. For instance, CSA typically does not offer the media coverage associated with other forms of sponsorship, such as sports, and

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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arguably puts less emphasis on a return on investment (Daellenbach et al., 2013; LeClair & Gordon, 2000). In addition, whereas corporate sponsorship and philanthropic actions typically target different causes, this distinction is often less clear for CSA (Gautier & Pache, 2015). Furthermore, some studies argue that the shift towards more strategic partnerships with cultural institutions is evidence of community support for socially disadvantaged groups rather than just cash donations (Comunian, 2009; Nickell, Cornwell, & Johnston, 2011). Comunian (2009) claims that this shift in the nature of CSA undermines the traditional distinction between corporate philanthropy and sponsorship, and that the benefits may be significant for companies engaging in CSR-linked support for the arts. For instance, Dhaliwal, Li, Tsang, and Yang (2014) state that engagement in social initiatives could lead to improvements in financial performance, productivity, and attraction and retention of talent. When examining the role of CSA in CSR strategies at a company level, the diversified landscape of CSA approaches becomes even clearer. There are banks that state that artworks are not bought for investment purposes, but to stimulate the intellect of employees, letting them be inspired by the artists’ curiosity and innovative ways of expressing ideas (Lewandowska, 2015).2 Other institutions maintain that art is bought to decorate boards and public spaces, which, in turn, is part of their marketing mix intended to have an impact on clients (Iqbal, 2009). Decision-making processes for CSA then imply a systematic approach in which multiple stakeholders are involved. Employees of banks working with CSA on a daily basis operate in different departments, including CSR, community investments and public relations (Lewandowska, 2015). In terms of decision-making about CSA, the involvement of several people working in different departments would imply that, typically, more than one professional is involved. Despite O'Hagan and Harvey (2000) arguing that CSA is largely driven by non-monetary rewards for managers and CEOs and that decision-making is hence based on personal values, Branco and Rodrigues (2008) state that only a small number of banks engage in CSR because of a manager's personal values. Instead it is typically a small group of people that decides about CSA, including art professionals, marketing managers and employees with a particular interest in art (Turgeon & Colbert, 1992). Accordingly, O'Hagan and Harvey (2000) ultimately find that most CSA decisions are taken collectively rather than individually and that firms engaging to a higher degree with CSA have more systematic decision-making processes. Lewandowska (2015) finds that firms with high employee involvement in CSA decision-making processes across different departments undertake partnership collaborations with art institutions more often than other entities. Furthermore, to protect the autonomous nature of art and the principle of art for art's sake, some firms deliberately only involve art professionals in CSA decision-making processes (Lewandowska, 2016).

2.2. CSA and CSR disclosure Firms engage with CSA and, more generally, with CSR initiatives to make a positive impact on stakeholders and improve their corporate image (Colbert et al., 1994). However, Pomering and Dolnicar (2009) state that customers are positively affected by

2 For instance, ING identifies CSA as community investments in its annual report (ING annual report, 2017, p. 348, available at https://www.ing.com/Investorrelations/Annual-Reports.htm). Deutsche Bank instead justifies its CSA on the grounds that it inspires people (Deutsche Bank statement available at: https:// www.db.com/asiapacific/en/content/art_music.html).

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the CSR initiatives of organizations only if they are aware of them; thus, it is the disclosure of such initiatives, rather than their mere existence, that matters. Schwaiger et al. (2010), for example, examine whether CSA affects corporate reputation and find that it has an impact only if people are informed about it. They also find that “people perceive a general value to society associated with sponsorship of the arts, independent of whether they are interested in such events or not” (Schwaiger et al., 2010, p. 87). The basic idea is that, in response to a communication about CSA, a person relates to the event and the company involved in it at both a rational and an emotional level. From the entity's point of view, the positive emotions of people towards CSA will be reflected in a positive perception of the company and its products or services. In addition, art events create a positive effect on an affective dimension because consumers and entities are linked at an emotional level (Schwaiger et al., 2010). Based on this evidence, the importance of continuous communication about CSA is stressed because it is the disclosure that enhances perception of the CSR performance of firms for both internal and external stakeholders (Larson, Flaherty, Zablah, Brown, & Wiener, 2008). The importance of communication about CSR activities, such as CSA, is supported by several other studies. Dhaliwal et al. (2014) emphasize the relevance of CSR disclosure in revealing the CSR performance of companies and find that the level of CSR disclosure reduces information asymmetry, resulting in a lower cost of capital. Cahan, De Villiers, Jeter, Naiker, and Van Staden (2016) indicate that firms with superior CSR performance have incentives to provide higher levels of CSR disclosure and that, more importantly, stakeholders are able to recognize the content of the firms' communications. Indeed, they find a positive relation between the amount of CSR disclosure and a firm's value, and they claim that if investors thought CSR disclosure was being used for windowdressing purposes, they would not react or would react negatively to it. Accordingly, Chauvey, Giordano-Spring, Cho, and Patten (2015) find that companies, over time, report more extensively on CSR initiatives. Interestingly, however, they find that the informational quality of such disclosures remains quite low because fewer and fewer entities disclose negative CSR performance in their reports. Finally, Branco and Rodrigues (2008, p. 165) stress that “because community involvement disclosure is concerned with how the company relates to society through its charitable donations, sponsorship of arts, sports and education, etc., it should be higher in companies that have a greater incentive to be involved in such activities” as is the case with financial institutions. 2.3. Hypothesis development The literature explored in previous sections highlights the evolution of the relationship between the arts and businesses, which has now become a form of partnership where arts organizations and businesses exchange their know-how to create events and initiatives. This interaction benefits both the arts organizations and the business entities. The former do not dilute their autonomous nature by engaging with commercial entities, but at the same time, receive financial and managerial resources that otherwise would not have been available to them. The latter can acquire skill sets and creative inspiration from arts institutions (Preece, 2010) as well as engage with an effective means of improving their image and reputation (Colbert et al., 1994). Finally, such partnership also benefits society by providing easier access to the arts and culture (LeClair & Gordon, 2000). CSA, like any other CSR initiative, however, must be properly communicated in order to have an impact on companies’ stakeholders (e.g., Cahan et al., 2016; Dhaliwal et al., 2014; Schwaiger et al., 2010).

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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The extant literature shows that CSA is indeed a component of a company's CSR strategy and communication (e.g., Maignan & Ralston, 2002) even if it has a peculiar nature that could be linked more to advertising than to a community-based initiative (Moore, 1995). In contrast to most of the previous research, we aim to explore whether effective CSR strategies also include CSA. We, therefore, investigate the link between the amount of CSA disclosure and the CSR vocation of entities that have received tangible and independent external recognition for their CSR initiatives in the form of a CSR award. In line with Cahan et al. (2016), we place particular emphasis on CSA disclosure rather than CSA performance per se. Indeed, Cahan et al. (2016) and Dhaliwal, Li, Tsang, and Yang (2011) show that users are able to distinguish between true and window-dressing CSR reporting. This evidence is very important in light of the findings of Chauvey et al. (2015), which indicate that companies are selective in disclosing CSR activities and that fewer and fewer firms disclose negative CSR performance in their reports. Following this line of reasoning, it can be argued that if financial institutions did not consider CSA to be capable of generating a positive CSR performance, but rather as initiatives exclusively driven by a director's hobby, business or taste, they would have no interest in disclosing it voluntarily (Chauvey et al., 2015). If they did so, as an attempt to legitimize these actions to their stakeholders, then based on Cahan et al. (2016), it should not work because stakeholders would recognize their windowdressing purposes. In accordance with business entities viewing CSA as a component of their CSR strategy (Maignan & Ralston, 2002), we hypothesize that there is a link between CSR strategies that include CSA and external CSR recognition. We also hypothesize that the amount of CSA disclosure predicts the attainment of a CSR award by a financial institution based on the following: the peculiar nature of CSA as a CSR initiative (Moore, 1995); because arts events do not usually have the high visibility of other types of sponsorship (LeClair & Gordon, 2000) and are not always linked to expected returns in terms of immediate profitability (Daellenbach et al., 2013); given that financial institutions have been historically linked to CSA (Iqbal, 2009); and provided that users can distinguish genuine from opportunistic CSR disclosure (Cahan et al., 2016). If our Hypothesis were verified, we would provide empirical evidence that, nowadays, financial institutions commanding a good reputation for their CSR are also those that include CSA as part of such strategies. Accordingly, our hypothesis can be stated as follows: Hypothesis. There is a positive relationship between CSA disclosure and the attainment of a CSR award. 3. Sample and methodology 3.1. Sample selection Our sample includes European financial institutions during the period 2004e2013. Indeed, in addition to a long culture of arts patronage by firms in this geographical area, the choice of European entities takes into consideration the international character of CSA and the impact of firms across national borders (e.g., Andrikopoulos, Samitas, & Bekiaris, 2014). Furthermore, strong uniformity has been found in terms of how European firms report on their CSR activities (Perrini, 2005). The sample period starts in 2004, the year in which the OECD published a revised version of their influential principles of corporate governance, after which improved and homogeneous corporate governance practices were expected, particularly within large financial institutions as those studied here (Jo & Harjoto, 2011). The sample period ends in 2013, the last year for which all information was available at the time of data collection.

Previous research on CSR uses samples extracted from rankings, built, for example, on the CSR experience of firms (e.g., Perrini, 2005) or based on firm size (e.g., Giannarakis, 2014; Jizi, Salama, Dixon, & Stratling, 2014; Klettner, Clarke, & Boersma, 2014). In keeping with this approach, our sample is drawn from the 147 European financial institutions listed on Forbes Global 2000 during the sampling period. The rank is built on the overall firm size of listed companies with respect to total assets. Since previous studies found a positive correlation between disclosure and firm size, Ntim and Soobaroyen (2013) argue that a sample based on firm size controls for this. Significant amounts of data had to be manually collected (i.e., annual reports and social reports of companies were manually searched for CSA information over the entire time series to construct the dependent variable e see section 3.2 for details). Given this, the sample was further refined by focusing on the largest 50 financial institutions in Forbes Global 2000. This choice is consistent with previous studies on similar topics, which did not investigate entire populations of firms in a given industry, but only focused on the biggest ones since company size influences corporate responsibility disclosure (e.g., Ntim, Lindop, & Thomas, 2013; Ntim & Soobaroyen, 2013) and, therefore, enhances the comparability with previous research.3 It also ensures that the sample firms have a similar level of “regulatory scrutiny and public visibility” (Jizi et al., 2014, p. 605). To ensure sample homogeneity across our time series, eight firms were eliminated for the following reasons: two companies were market regulators and, therefore, had objectives that diverged from those of mainstream financial institutions; two firms had missing financial data; four entities had not been listed during the entire ten-year period analysed. This procedure produced a sample of 42 companies operating in the following countries: Austria (1), Belgium (2), Denmark (1), France (5), Germany (4), Italy (4), Netherlands (2), Norway (1), the United Kingdom (9), Spain (4), Sweden (4) and Switzerland (5), over a ten-year time series, giving a total of 420 firm-year observations.4 3.2. Measurement of CSA disclosure For the collection of CSA disclosure data, we used a content analysis technique on companies’ annual and social reports (e.g., Haji, 2013; Jizi et al., 2014; Khan, 2010).5 Even though companies are able to inform their stakeholders about CSA in many other ways (e.g., social media and corporate websites), we focused on these

3 Prior empirical studies on the corporate governance-CSR link, which used the technique of content analysis, were either cross-sectional studies with relatively large sample sizes considering a single year (Chan et al., 2014; Giannarakis, 2014; Jizi et al., 2014) or longitudinal studies with small sample sizes (Ntim & Soobaroyen, 2013; Mahadeo et al., 2011). Most of these studies were focused primarily on annual reports and on one particular country. Furthermore, they only focused on the biggest firms in an industry. For example, Ntim et al. (2013) investigated the corporate risk disclosure of South-African firms operating in five identified industries, but they only investigated the 10 largest companies operating in each of them. Similarly, Ntim and Soobaroyen (2013) examined the Black Economic Empowerment disclosures of South-African listed corporations operating in five different industries but focused only on the 15 largest firms operating in each of them. 4 The final sample size is in line with similar longitudinal studies with sample sizes ranging from 41 (Mahadeo et al., 2011) to 85 (Haji, 2013) listed companies. It is also worth noting that these studies focus on non-financial companies and that their time horizons are generally shorter than the ten-year sample period of our research. 5 By ‘social report’ we mean a report, different from the financial statement, used by firms to discuss their approach to managing key environmental causes, social issues, etc. Some banks call it ‘sustainability report’ and others call it ‘integrated report’.

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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two documents for several reasons. Firstly, an annual report is seen as the most important and effective reporting device for the dissemination of a corporate social image, since it is aimed at a wide range of stakeholders (Jizi et al., 2014). Its content is tightly controlled by managers, directors and auditors, and is, therefore, more reliable than information included in other reports (Jizi et al., 2014). However, an exclusive focus on annual reports may provide an incomplete view of this topic and, therefore, we also examine social reports. Secondly, previous studies looking at sub-areas of CSR, such as black economic empowerment (Ntim & Soobaroyen, 2013), focused on both annual and social reports. Following the same technique, we are able to draw comparisons and complement the current state of research. Thirdly, from a methodological point of view, both annual and social reports are widely available, thus systematic data collections are facilitated (Ntim & Soobaroyen, 2013). We follow the content analysis methodology drafted for CSR studies, taking into account reliability and validity concerns associated with developing and testing a coding instrument (Boyatzis, 1998) due to the subjective nature of content analysis (Haji, 2013). We have aimed to minimize the influence of subjectivity in several ways. Firstly, when choosing the measurement instrument, we found that three different measures for the assessment of CSR disclosure are typically used: words, sentences and proportions of a page (Chan, Watson, & Woodliff, 2014). Since words do not carry any meaning without their context and coding the areas of a page is highly subjective due to layout differences, we opted for sentence counting, which is the most unambiguous measure as sentences are easy to identify (Chan et al., 2014; Ntim et al., 2013). We focused exclusively on disclosure quantity rather than quality. We also included non-narrative disclosure (photographs of art and charts on arts expenditure), because of its relevance in relation to CSA and its power to attract attention from stakeholders (Chan et al., 2014). A checklist instrument with various items was used to categorize CSA disclosure (Klettner et al., 2014). A scoring method based on an unweighted approach was applied (Haji, 2013; Khan, 2010) by increasing the score by one for any sentence and/or photograph in the annual or social report that contained CSA information. We are aware that entities may have multiple reasons for being involved in CSA, which could include altruistic arts support,

6 Examples of such CSA included in the study are those that “support both the major cultural institutions, particularly the leading theatres, which increasingly need financing from private sponsors to continue with their activities, and numerous initiatives promoted by local associations and organizations, focusing particular attention on those involving young artists”, or sponsoring “exhibitions and music and theatrical events, with the participation of major artists, composers and musicians, as well as literary and artistic events of national and international interest” (Generali Group, sustainability report, 2012, p. 116, available at https:// www.generali.com/info/download-center/sustainability/bilanci). They also include support for training projects “supported according to criteria of international excellence, to continually add new luster to the traditions of theatre, opera, ballet and music as well as for the dissemination of art, music and theatre both to disadvantaged people and in schools in favour of children who do not have sufficient financial means” (Intesa Sanpaolo, sustainability report, 2012, p. 69, available at https://www.group.intesasanpaolo.com/scriptIsir0/si09/sostenibilita/eng_ bilancio_sociale.jsp#/sostenibilita/eng_bilancio_sociale.jsp) as well as support for “classical music and contemporary arts and cultivating partnerships with preeminent cultural institutions [by providing] these institutions with financial and organizational support. […] In Italy through its enduring partnership with the Filarmonica della Scala, since 2000 UniCredit has supported the orchestra's concert season, national and international tours, and special events. [It has also provided support for] educational initiatives through the second edition of the Sound, Music! program in 2012, which teaches children about classical music” (Unicredit, sustainability report, 2012, p. 68, available at https://www.unicreditgroup.eu/content/ dam/unicreditgroup-eu/documents/en/sustainability/sustainability-reports/2012/ Sustainability2012.pdf).

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strategic arts support and investment in potentially valuable assets. Separating such dimensions is quite difficult, especially using a quantitative methodology. However, since we are not interested in purely strategic CSA, we used a very narrow definition of CSA, which excludes general historical arts initiatives (e.g., historical museums), sociocultural ones (e.g., supporting literacy in developing countries) and those of a general cultural nature (e.g., preservation of World Heritage sites), as well as non-social corporate practices (e.g., art insurance or artworks as financial assets). Thus, even if we did not have the means to look behind the actual motivations of entities engaged with CSA, we did the highest efforts possible to exclude, at the very least, any CSA that lacks a clear socially related motive.6 Appendix A contains the detailed item search and scoring procedure. Finally, to avoid the results being affected by the different communication policies of firms (i.e., entities that decide, in general, to produce more or less excessive reports), our analyses are based on the proportion of CSA sentences compared to the total sentences reported in entities’ annual and social reports.

3.3. Measurement of CSR recognition In this paper, we do not simply look at whether entities claim to be engaged with CSR initiatives, but rather we focus on tangible recognitions of CSR actions. We measure CSR recognition using the time series data from Datastream coded ‘SOCODP074 e Corporate Responsibility Awards’, which captures the awards given to a particular company for its social activities during a fiscal year. To be included in this variable, the awards are to be given by external persons or the industry, which somehow ensures that they are awarded by independent parties. In addition, this variable does not consider the following awards: general product and industry awards, financial awards, employee awards, corporate governance awards, internal awards and listing on a CSR index. Thus, it focuses only on those related to the CSR activities of firms. Information about CSR recognitions awards is taken from publicly available sources, such as the sustainability report, integrated annual report and press releases. In contrast with a CSR index, this variable avoids subjective classifications and features used in the construction of an index and, more importantly, it looks at whether the CSR strategy of a company has received recognition via an award granted by external parties.7 The ‘Corporate Responsibility Awards’ data take the value ‘Y’ if the company received an award for its social, ethical, community or environmental activities in a given year and ‘N’ otherwise. It has been transformed into a dummy variable, CSR_AWARD, which takes a value of one if the data item is ‘Y’ and zero otherwise.

7 Examples of CSR awards include: the ‘Best CSR Bank’ awarded by the London Global Banking and Finance Review site (Intesa Sanpaolo, sustainability report, 2013, p. 94, available at https://www.group.intesasanpaolo.com/scriptIsir0/si09/ contentData/view/BILANCIO_SOCIALE_2013_eng.pdf?id¼CNT-050000000266A1E&ct¼application/pdf); the ‘Award for Sustainable Investor of the Year’ promoted by the Forum per la Finanza Sostenibile because of the implementation of an integrated approach to the management of sustainable and responsible investment strategy, acting both on the Group proprietary assets and on a number of products intended for investment clients, using an advanced environmental, social, and governance analysis methodology (Generali Group, sustainability report 2013, p. 23, available at https://www.generali.com/info/ download-center/sustainability/bilanci); awards in recognition of major contributions made by our colleagues to corporate volunteer initiatives, which support solidarity and environmental causes; and awards for the support provided to humanitarian foundations (Unicredit, sustainability report, 2013, p. 67 and S-23, available at https://www.unicreditgroup.eu/content/dam/unicreditgroup-eu/ documents/en/sustainability/sustainability-reports/2013/Bilancio-Sostenibilita2013-ENG.pdf).

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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D. Campa, E.W.A. Zijlmans / European Management Journal xxx (xxxx) xxx

3.4. Regression model To investigate whether the artistic involvement of entities, measured by the relative amount of CSA disclosure, is a good predictor for CSR recognition, we estimate a probit model where the dependent variable is CSR_AWARD and the amount of CSA disclosure is included as an independent variable. The model is outlined in the following equation (1): CSR_AWARDit ¼ b0 þ b1TOT_CSA_DISCLOSUREit þ b2CGSCOREit þ b3ROEit þ b4LEVit þ b5SIZEit þ b6P/Eit þ b7CROSSLISTit þ 3it (1) where: CSR_AWARD is a dummy variable that takes one if a company received a CSR award in a particular year and zero otherwise; TOT_CSA_DISCLOSURE is the number of CSA sentences in the annual and social reports divided by the total number of sentences in those reports, multiplied by 100; CGSCORE is the corporate governance score; ROE is net income divided by total equity, multiplied by 100; LEV is financial leverage calculated as the percentage of total debt to total investments; SIZE is the natural logarithm of the firm total investments; P/E is the price-earnings ratio at the end of the year; CROSSLIST is a dummy variable that takes the value of one if a company is listed on two or more stock exchanges. A positive and significant b1 indicates that the probability of getting an award for social, ethical, community or environmental activities is positively related to the amount of CSA disclosure. If b1 is not significant, or if it is negative and significant, it suggests that the amount of CSA disclosure is not related to the attainment of a CSR award, which, in accordance with Cahan et al. (2016), would show that CSA disclosure is either irrelevant when firms are rewarded for their CSR initiatives, or that it is perceived as opportunistic by the stakeholders of financial institutions. In addition to the amount of CSA disclosure, equation (1) controls for corporate governance quality (Khan, Muttakin, & Siddiqui, 2013) as well as for firm-level financial variables such as performance, leverage, size and growth (Andrikopoulos et al., 2014; Chan et al., 2014; Giannarakis, 2014; Khan, 2010; Mahadeo, OogarahHanuman, & Soobaroyen, 2011) and the cross-listing status of entities (Ntim et al., 2013; Ntim & Soobaroyen, 2013).8 Model (1) also includes dummy variables for the year. P-values are calculated from robust standard errors clustered by unique financial institution.9 4. Results and discussion 4.1. Descriptive statistics and univariate analyses Table 1 reports the descriptive statistics for the variables used in this study. The table shows that, on average, 0.35% of sentences in firms' annual and social reports in any one year focus on CSA. It may seem a relatively small number, however it is worth noting that this variable takes into account the total amount of firms’ disclosure, including financial and strategic communication that constitutes almost all communication through institutional reporting. About 46% of the firm-year observations are related to the attainment of a CSR award. The mean corporate governance score is 70.3 out of 100. Firms exhibit a positive return on equity, a leverage ratio of almost 72% and significantly high expectations for growth. About 45% of the observations refer to entities listed in more than one financial

8

The continuous variables are winsorized at the 1% and 99% percentiles to avoid results being biased due to the presence of outliers. 9 Given the limited number of entities per country, the model does not include country dummy variables.

Table 1 Descriptive statistics. Variable

N.

Mean

Median

St. Dev

Min

Max

TOT_CSA_DISCLOSURE AR_CSA_DISCLOSURE SR_CSA_DISCLOSURE CSR_AWARD CGSCORE ROE LEV SIZE P/E CROSSLIST

420 420 420 420 420 420 420 420 420 420

0.357 0.134 1.013 0.464 70.328 9.348 0.718 18.198 12.663 0.452

0.001 0.011 0.000 0.000 75.220 11.525 0.842 18.214 10.450 0.000

0.661 0.004 0.039 0.499 19.747 11.185 0.241 1.198 9.916 0.498

0.000 0.000 0.000 0.000 7.750 33.560 0.212 15.685 2.360 0.000

4.070 6.233 38.916 1.000 96.670 26.080 0.960 20.414 58.100 1.000

Variables are defined in section 3.4.

market. A Pearson correlation matrix is presented in Table 2. The proportion of CSA disclosure included in companies' reports is positively related to the attainment of a CSR award (r ¼ 0.116; pvalue ¼ 0.018) suggesting that there is a significant univariate relationship between these two variables. It is also negatively correlated with the quality of firms’ governance (r ¼ 0.109; pvalue ¼ 0.025) and positively correlated with the leverage of financial institutions (r ¼ 0.128; p-value ¼ 0.009). Given the presence of significant correlations between CSA disclosure and the control variables used in our model, only a multivariate analysis can provide statistically reliable evidence to test our Hypothesis.10 4.2. Regression analysis Table 3 reports the estimation of equation (1). The model is highly significant (p-value ¼ 0.000) and the area under the ROC curve is 0.845, indicating that the model is very accurate in separating the group of firms that have attained a CSR award from those that have not, based on the explanatory variables included in the model. The coefficient b1 is positive and significant at the 5% level (p-value ¼ 0.011), which suggests that the proportion of CSA disclosure of financial institutions is positively related to the probability of attaining recognition for their CSR actions. In terms of control variables, CSR awards are positively related to the ROE (b3 is positive and significant at the 5% level) and to the P/E ratio (b6 is positive and significant at the 10% level) of financial institutions, indicating that profitable firms and those with high growth expectations have more resources to dedicate to voluntary reporting (Chan et al., 2014; Giannarakis, 2014; Khan, 2010) and that they also feel greater pressure to validate their existence to stakeholders (Haniffa & Cooke, 2005; Mahadeo et al., 2011). In general, our evidence suggests that variance in the extent of CSA disclosure of financial institutions is a significant predictor for recognition of their CSR strategies, using the attainment of a CSR award as a proxy for it. Accordingly, it indicates that financial institutions with effective and appreciated CSR strategies are also those that are more engaged with CSA, thus the latter should not be considered exclusively as a director's art-collecting hobby or motivated solely by investment drivers. 4.3. Additional tests It can be argued that the attainment of a CSR award could be in

10 There are no extremely high values in the correlation table. However, we still performed a diagnostic test for multicollinearity by estimating the variance inflation factor (VIF) coefficients for our regression models, which were always below the threshold of 10 (Kennedy, 2008), suggesting that multicollinearity does not affect our results.

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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Table 2 Pearson correlation matrix TOT_CSA_DISCLOSURE AR_CSA_DISCLOSURE SR_CSA_DISCLOSURE CSR_AWARD CGSCORE TOT_CSA_DISCLOSURE AR_CSA_DISCLOSURE SR_CSA_DISCLOSURE CSR_AWARD CGSCORE ROE LEV SIZE P/E CROSSLIST

0.646*** 0.644*** 0.116** -0.109** -0.013 0.128*** 0.046 0.020 -0.060

0.067 0.001 -0.153*** -0.083* 0.078 -0.027 0.001 -0.106**

0.127*** 0.019 0.028 0.048 0.067 0.012 0.018

0.052 -0.203*** -0.006 0.123** 0.128*** -0.060

0.010 -0.115** 0.076 -0.039 0.080

ROE

LEV

SIZE

P/E

-0.096* -0.070 0.656*** -0.025 0.028 0.046 -0.041 0.077 0.165*** 0.063

*, **, *** indicate that the p-value associated with the coefficient is significant at the 10%, 5%, 1% level, respectively, two-tailed. Variables are defined in section 3.4.

Table 3 CSR award and CSA disclosure.

Table 4 CSR award and CSA disclosure: lagged values for independent variables.

Dependent variable

CSR_AWARD

Dependent variable

CSR_AWARD

INTERCEPT

4.360 (0.398) 0.778** (0.011) 0.016 (0.314) 0.038** (0.024) 0.350 (0.785) 0.054 (0.865) 0.032* (0.068) 0.357 (0.545)

INTERCEPT

4.832 (0.359) 0.927*** (0.000) 0.015 (0.285) 0.018 (0.248) 0.195 (0.881) 0.120 (0.703) 0.047* (0.096) 0.318 (0.600)

Yes 420 77.25*** 0.845

Year dummies Observations Wald Chi^2 Area under the ROC curve

TOT_CSA_DISCLOSURE CGSCORE ROE LEV SIZE P/E CROSSLIST Year dummies Observations Wald Chi^2 Area under the ROC curve

Notes. P-values (in parentheses below the coefficients) are calculated using robust standard errors clustered by firm. *, **, *** indicate that the p-value associated with the coefficient is significant at the 10%, 5%, 1% level, respectively, two-tailed. Regression model: b1CSR_AWARDit ¼ b0 þ b1TOT_CSA_DISCLOSUREit þ b2CGSCOREit þ b3ROEit þb4LEVit þ b5SIZEit þ b6P/Eit þ b7CROSSLISTit þ 3it. Variables are defined in section 3.4.

recognition of the past activities of companies (i.e., an award received in year t may be related to initiatives undertaken in year t1). Accordingly, we have estimated our model (1) using lagged values for the independent variables, the results of which are reported in Table 4. The model is highly significant and the evidence is consistent with our main analysis. More precisely, the coefficient b1 is positive and significant at the 1% level (p-value ¼ 0.000), which supports the finding that the relative amount of CSA disclosure in companies’ reports is a strong predictor for the attainment of a prize for their CSR actions. In terms of control variables, we still find a positive and significant b6, but do not find any significant relationship between CSR awards and the lagged ROE of financial institutions. Annual and social reports have a different nature. The former are mandatory documents mainly focused on strategic and financial aspects of entities, whereas the latter are used for the voluntary disclosure of initiatives not strictly related to the core business of firms (Belkaoui & Karpik, 1989). Accordingly, we have estimated our model separating the amount of disclosure included in firms' annual reports from that reported in entities' social reports. We use two variables, AR_CSA_DISCLOSURE and SR_CSA_DISCLOSURE,

TOT_CSA_DISCLOSURE CGSCORE ROE LEV SIZE P/E CROSSLIST

Yes 378 94.79*** 0.835

Notes. P-values (in parentheses below the coefficients) are calculated using robust standard errors clustered by firm. *, **, *** indicate that the p-value associated with the coefficient is significant at the 10%, 5%, 1% level, respectively, two-tailed. Regression model: b1CSR_AWARDit ¼ b0 þ b1TOT_CSA_DISCLOSUREit-1 þ b2CGSCOREit-1 þ b3ROEit-1 þb4LEVit-1 þ b5SIZEit-1 þ b6P/Eit-1 þ b7CROSSLISTit-1 þ 3it. Variables are defined in section 3.4.

which are calculated, respectively, as the amount of CSA sentences included in firms’ annual and social reports divided by the total number of sentences reported in the same documents. Model (1) is firstly estimated including AR_CSA_DISCLOSURE and SR_CSA_DISCLOSURE separately and then again using both variables at the same time. Results are reported in Table 5. Column A focuses on CSA disclosure presented in the annual reports of firms. The coefficient b1 is not significant (pvalue ¼ 0.679), indicating that CSA disclosure reported in the annual report is not a predictor for the attainment of a prize for the CSR initiatives of financial institutions. Column B focuses on CSA disclosure presented in the social reports of entities. Here, the coefficient b1 is positive and significant at the 1% level (pvalue ¼ 0.002), which suggests that it is the amount of CSA disclosure in the social reports of financial institutions that predicts the attainment of a CSR award. The evidence reported above is also confirmed in column C where AR_CSA_DISCLOSURE and SR_CSA_DISCLOSURE are included in the model at the same time.11

11 An additional analysis (not tabulated), which uses lagged values of the independent variables, supports the results reported in Table 5.

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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D. Campa, E.W.A. Zijlmans / European Management Journal xxx (xxxx) xxx Table 5 CSR award and CSA disclosure: lagged values for independent variables. Dependent variable

(A) CSR_AWARD

(B) CSR_AWARD

(C) CSR_AWARD

INTERCEPT

4.145 (0.408) 0.208 (0.679)

3.506 (0.491)

0.015 (0.300) 0.036** (0.014) 0.559 (0.627) 0.059 (0.848) 0.032* (0.056) 0.375 (0.526)

0.123*** (0.002) 0.017 (0.247) 0.037** (0.016) 0.656 (0.591) 0.024 (0.938) 0.031* (0.060) 0.409 (0.482)

3.604 (0.480) 0.119 (0.777) 0.121*** (0.002) 0.017 (0.265) 0.037** (0.013) 0.633 (0.605) 0.027 (0.931) 0.031* (0.056) 0.405 (0.489)

Yes 420 75.94*** 0.831

Yes 420 86.52*** 0.847

Yes 420 85.27*** 0.846

AR_CSA_DISCLOSURE SR_CSA_DISCLOSURE CGSCORE ROE LEV SIZE P/E CROSSLIST Year dummies Observations Wald Chi^2 Area under the ROC curve

Notes. P-values (in parentheses below the coefficients) are calculated using robust standard errors clustered by firm. *, **, *** indicate that the p-value associated with the coefficient is significant at the 10%, 5%, 1% level, respectively, two-tailed. Regression models: Column A: b1CSR_AWARDit ¼ b0 þ b1AR_CSR_DISCLOSUREit þ b2CGSCOREit þ b3ROEit þ b4LEVit þ b5SIZEit þ b6P/Eit þ b7CROSSLISTit þ 3 it. Column B: b1CSR_AWARDit ¼ b0 þ b1SR_CSR_DISCLOSUREit þ b2CGSCOREit þ b3ROEit þ b4LEVit þ b5SIZEit þ b6P/Eit þ b7CROSSLISTit þ 3 it. Column C: b1CSR_AWARDit ¼ b0 þ b1AR_CSR_DISCLOSUREit þ b2SR_CSR_DISCLOSUREit þ b3CGSCOREit þ b4ROEit þ b5LEVit þ b6SIZEit þ b7P/Eit þ b8CROSSLISTit þ Variables are defined in section 3.4.

Overall, we find that only the CSA disclosure reported in the social reports of financial institutions is a predictor for the attainment of a CSR award, which suggests that the annual reports and social reports of financial institutions have different informative relevance, at least in relation to CSR initiatives in the form of CSA, for their stakeholders. Indeed, the information reported in social reports is associated with a CSR award, probably because the artsrelated initiatives reported here are viewed as more ‘altruistic’ than those reported in the annual report, which may be interpreted as more ‘value-creating’ projects. Hence, our results suggest that social reports are viewed as the most legitimate document for informing stakeholders about CSA. 5. Conclusions As far back as the thirteenth century, financial institutions were among the most significant arts patrons in Europe. Engagement with the arts has significantly increased and become more professionalized over time, and a description of these initiatives can be found in companies’ mandatory and voluntary disclosures. Arts-oriented literature finds a value-increasing function for arts engagement by businesses and we aim to make a unique contribution to the current state of research through an exploratory study that links the CSA of financial institutions with the success of their CSR initiatives. Using a sample of European financial institutions over a ten-year period, we find that financial institutions that have gained a good reputation in relation to their CSR activities also engage in significant CSA. The results of this study shed light on the role of CSR activities focused on the arts, which may be seen not only from an altruistic point of view but also as a mere investment in potentially valuable assets.12 We find that CSA is viewed and perceived as a CSR

12

We thank an anonymous reviewer for highlighting this point to us.

3 it.

strategy, but it depends to a significant extent on how companies communicate this to stakeholders. In fact, we show that if CSA is communicated through annual reports, it has no relationship with the attainment of a CSR award, whereas when CSA is disclosed in companies’ social reports, it is associated with the attainment of a CSR award. Our findings complement previous studies on CSR and show the relevance of financial institutions' CSA from a CSR point of view, suggesting ways in which entities should communicate this. In particular, our results suggest that the annual reports and social reports of companies have a different informative relevance, at least in relation to CSR initiatives in the form of CSA, for the stakeholders of financial institutions. Accordingly, our evidence provides useful insights for companies' communication strategies indicating, for example, that social reports are the best channel to communicate CSA initiatives to stakeholders. Our findings add to existing knowledge of financial institutions, neglected by previous research because of the comparability issues caused by including such firms in multisector studies (Ntim & Soobaroyen, 2013). In addition, the longitudinal time horizon provides researchers and practitioners with insights into the development of the CSR-CSA link within European financial institutions. Finally, our results may encourage ‘art-sensitive’ investors to target their investment decisions on institutions recognized for their CSR initiatives because they are also those that are more likely to engage with CSA. This research is not free from limitations. Firstly, in accordance with previous literature (e.g., Haji, 2013; Jizi et al., 2014), we used information provided through institutional corporate reporting (i.e., annual and social reports). Entities, however, may use several other forms of communication, such as websites, social media, sponsored events, billboards and television adverts. Because of the large sample size, quantitative methodology and entities from several different countries, the analysis of all possible types of

Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003

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disclosure was not feasible. The investigation of multiple forms of communication could be addressed in future research by collecting CSA data using a qualitative approach (i.e., through interviews or questionnaires sent to financial institutions exploring the nature of their communications about CSA), although this may significantly affect the sample size. The sentence counting method used to create our dependent variable may overestimate the disclosure of companies that report a single CSA initiative several times and vice versa. Nonetheless, as discussed in section 3.2, no technique is completely free from error. We are aware that an entity can own and collect art because of its potential market value rather than for CSR motives, so we carefully perused commercial databases and company reports to find a method or argument that could distinguish between these two motivations. However, none of the sources investigated explicitly report the actual underlying motivations for investment in the arts or CSA in general. Nonetheless, by adopting a delimited definition of CSA and by considering not just the formal involvement of entities in CSR initiatives but also the external recognition of those initiatives, we limit the impact of potential CSA initiatives exclusively associated with monetary drivers. In fact, in the extreme case where entities engage with the arts exclusively for profit-driven reasons, we would not have expected to find a consistent positive relationship between CSA and the attainment of a CSR award, as suggested by Cahan et al. (2016). Finally, in accordance with other studies (e.g., Ntim et al., 2013; Ntim & Soobaroyen, 2013), we did not investigate the universe of financial institutions, but rather focused on the largest entities, adopting all the protocols necessary for statistical robustness to control for this fact. Nonetheless, our results may not be applicable to small financial entities. Declarations of interest None. Acknowledgment We acknowledge the support of the editor, Mina Kastanakis, and the extremely helpful comments, insights, and encouragement of the Associate Editor, Steven Grover, and of two anonymous reviewers. We are also very grateful to Ray Donnelly for his contribution and suggestions. Finally, we also thank the participants of a seminar held at the International University of Monaco for all their suggestions and encouragement. Any remaining errors are our own. Appendix A. CSA measuring instrument Following previous literature in which the technique of content analysis was based on a particular definition or document (e.g., Ntim & Soobaroyen, 2013), the definitions of CSR and the arts of the European Commission were used in order to assess if a sentence was CSA-related within a particular context or paragraph within an annual or a social report. As such, and following Mahadeo et al. (2011) who emphasised the double interpretation of words, nonarts related connotations with the keywords below, are not included. Hence, each match within a particular report is assessed individually and interpreted in its context in order to avoid multiple interpretations (e.g., ‘architecture’ and ‘culture’ with organizational meanings). Additionally, translations in native languages were made, for instance in order to search for arts-related institutional names, typically written in native languages (e.g., art is ‘kunst’ in Dutch and German).

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CSA categories Measured are: graphic information, images, and information on initiatives as part of CSR strategies and policies, donations, contributions, community activities and projects, partnerships, prizes and awards sponsoring, support programmes and employee activities Art; Arts; Artistic Theatre Museum; Gallery; Exhibition* Literature; Archives; Library Architecture Orchestra; Opera Musical; Music; Concert Film; Photography Ballet, Dance Poetry; Poem Culture; Cultural (heritage)** Graphic Design, Fashion * Only museums of arts (excluding history, war, financial museums); excluding organizational or financial-related exhibitions. ** Excluding general, and organizational connotations, such as ‘corporate culture’, and ‘remuneration culture’. The general phrase ‘cultural activities’ is only included if, within the context of the report, it was related to the CSA of a firm.

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Please cite this article as: Campa, D., & Zijlmans, E. W. A., Corporate social responsibility recognition and support for the arts: Evidence from European financial institutions, European Management Journal, https://doi.org/10.1016/j.emj.2019.01.003