Founding-Family Firms and CSR Performance in the Emerging Economy of India: A Socio-Emotional Wealth Perspective

Abstract

Family firms are considered a function of the family’s influence on the firm’s strategic choices by pursuing the family’s vision for the firm. Based on the premise of the socio-emotional wealth (SEW) theory, this study investigates whether they follow CSR as a strategic choice to grow and preserve SEW and embrace social norms. Using a sample of 88 publicly listed founder-controlled firms in India, this study found that more family member participation improves CSR performance. The relationship is more robust when participating members serve as owners and managers. Further, the relationship between family members is augmented when the member is a female participant. The findings of additional analyses show that family members are more attuned to environmental performance than the other two dimensions of CSR (social and governance). Finally, CSR is related to firm performance as assessed by ROA and Tobin Q. The findings support the socio-emotional wealth (SEW) theory as family members’ participation has incentives in choosing CSR as a strategic decision. CSR as a strategic choice offers economic and social benefits for family enterprises.

1. Introduction

So far, a large body of literature has focused on the impact of controlling families on a corporation from the stockholders’ perspective [1]. From the stakeholders’ perspective, the influence of the family’s long-term engagement in managerial control and ownership is uncommon [2]. Asia presents a study venue where stakeholder protection is comparatively lower. Corporations have made decisions based on the region’s common shareholder protection rights [3,4]. The decisions to control families are viewed as selfish and detrimental to society. Contrary to popular belief, the article contends that their long-term involvement as owners and managers mitigates stakeholders’ opinions. So far, research has argued that family businesses have certain features that may encourage them to be good corporate citizens. In this regard [5], propose socio-emotional wealth as a significant promoter of family enterprises’ CSR behaviors. As a result, family businesses are more inclined to commit to CSR because it strengthens and preserves their identity [4,5].

Such business commitment contributes to the social sustainability of the company. Corporate social sustainability collaborates with employees, their families, local communities, and society to improve the long-term quality of life, the environment, and the economy. Neglecting CSR is a risky business since it undermines CSR. CSR is a powerful driver of sustainability for family businesses. Long-term commitments may come from the lack of a thorough, forward-thinking plan. No matter how well-intended, CSR programs must be examined from a sustainability standpoint. Long-term implications and concerns must be considered when resolving issues. Family businesses provide an environment in which CSR can be handled holistically.

Similarly, SEW is viewed as a collective phenomenon of family members who founded and controlled an organization. Thus, the enterprises’ access to common family resources is legitimized [1,6]. It also promotes developing and producing vigorous family capital [7] and social norms [8]. Thus far, SEW has been used as an umbrella word to encompass family members’ participation in the plea to maintain control, extend control transgenerationally, and bond with stakeholders [9]. In the context of their SEW, family members behave as loss-averse investors, which sometimes leads to family firms foregoing rewarding new projects that may have future growth prospects [10,11]. While empirical evidence suggests that the desire of family members to preserve SEW drives family companies [12], SEW can also produce resources [13,14].

SEW has three dimensions: social identity, stakeholder affiliation [5], and transgenerational control—pursuing SEW resources [15]. Yet, as with all strategic resources, the worth of a corporation is determined by context [16]. The SEW sources help family members implement and leverage specific methods. Participating family members perform it efficiently because of SEW [3,4]. CSR is a strategic decision since it encompasses voluntary social, environmental, or stakeholder activities that impact the community, society, and the world [17]. Thus far, empirical evidence on the relationship between family ownership and CSR has been produced. However, the evidence lacks the context of participating family members and CSR. Family businesses have SEW resources that assist participating members in choosing long-term strategies such as CSR.

Beyond traditional studies to determine if family ownership influences CSR [18], this study concludes that in the pursuit of SEW, participating family members augment CSR as a strategic choice. CSR can improve SEW outcomes because (a) the firm’s strategic choices are reliable [19], (b) the firm is assured of a good response from its stakeholders [20], and (c) the firm has long-term strategic commitments [21]. Family members foster such environments, all trademarks of family businesses [22,23,24]. Family managers are critical observers compared to their counterparts due to their subjectivity of lesser information asymmetry and long-term commitment [25]. The superiority of family ties is a family-specific asset that provides a competitive advantage [26]. Hence, this study advances from conventional viewpoints, which often assume a family is an elephantine object and is sensitive to any addition of a family participant as a member, owner, and owner as manager [27]. The current article’s primary stakeholder perspective is CSR performance, a common stakeholder concern.

According to this study, family member participation improves CSR performance. Following recent literature, this study also investigates the cumulative effect of female members, as female presence has been extensively researched and piqued scholars’ curiosity over the previous two decades [28]. Numerous studies have linked their presence to CSR, and their inclusion as owners and managers makes the analysis more topical and relevant. According to this study, female members of participating families are more likely to advocate CSR activities. Female members improve company ethical standards compared to male family owners and/or managers since they are not susceptible to the glass ceiling problem. They can assert their job more subjectively than any other position in a corporate setting [29].

Furthermore, members’ roles in family enterprises are well-defined because these firms have gone through phases of conflicting interests among members and have had to deal with obstacles that could lead to their demise. Job descriptions could have a longer-term perspective and allow for level succession growth across roles, enabling ample time for successors to achieve adequately [30,31]. Including family members as owners and managers cause specific modifications that have long-term impacts on the firm’s prospects [30]. Firms are graded in a modern organizational context based on financial and non-financial performance. This increases the importance of this study because the role of family members as owners and managers is likely to influence CSR.

This study selects India for empirical testing. Family businesses are the oldest and most prevalent type of business; they form the foundation of the country’s economic structure and guide the other types of businesses. Even though professionally managed corporations have existed for many decades, family businesses are the backbone of India’s wealth, proving a vital and growing portion of the economy. They provide around 79% of the national GDP annually. According to a 2015 family business survey, India has 108 publicly traded family businesses, ranking third in the world behind China (167) and the United States (121). Because this study examines the CSR performance of a large section of the economy, this study becomes more relevant and contemporary. Regarding institutional framework and commercial shareholding/controlling structures, India, as a developing country, offers some contextual opportunities that Western countries do not. As a result, how stakeholders are aware of, active, and engaged in transition economies, their interactions with organizations, and their impact on enterprises may change and be distinct. Furthermore, prior research on corporate social responsibility (CSR) in developing countries shows that, despite increased awareness and concern about environmental and social sustainability, businesses have been hesitant to incorporate these practices into organizational policies [32]. These institutional gaps reduce stakeholder maturity/awareness, restricting their potential to influence firms like a mature institutional environment does. As a result, India is an intriguing case study.

This study intends to accomplish various goals. Primarily, it investigates the role of family members in CSR performance in India’s rising economy. Family members are separated for this purpose based on ownership, involvement, and gender. This enables researchers to highlight the in-depth role of family members in the CSR performance of India’s founding-family enterprises.

First, this study discovers that family member participation is related to CSR, even after controlling for firm-specific factors that may induce or inhibit CSR. In addition, the roles of family and non-family members are compared regarding CSR performance. The shift in coefficient estimates suggests that family members play a more prominent role in CSR performance than non-family individuals. The involvement of family members, occupation of important board seats, and the majority in numbers are the distinguishing elements of their prominent role. These characteristics have led to a widespread belief that family businesses take a longer-term approach to management. Furthermore, this study categorizes members as owners or managers to explore any positive or negative influence that members have based on incentives or information benefits. This study anticipates their roles becoming more evident if participants acquire ownership and function as managers. Owners have comparatively more incentives to monitor delegated managers than family members without shares.

Furthermore, because family managers do not confront the problem of information asymmetry, they are more effective monitors than family members with no managing responsibility. In contrast, when family members are not involved in management, the problem becomes more apparent. As a result, the managerial position tempers the incentives to monitor and participate in decision-making. This study divides the members into family owners and family owners as managers for empirical testing. The findings are consistent with ownership incentives and family members’ information advantage in promoting CSR.

Furthermore, the role of female family members as moderators is empirically evaluated. There has been a prior study on gender diversity and CSR [1,33]. Several further studies looked into the family effect, establishing a study link between gender diversity and CSR. This study discovered a scarcity of studies on the impact of female family members on CSR. This study investigates explicitly if and how the beneficial effect of family members changes across gender, as the literature indicates that female relatives’ engagement in CSR is comparatively more pronounced. Thus far, empirical research on the relationship between female family members and CSR has been limited. Thus, this study is a pioneering study on the impact of female family members on CSR in emerging markets such as India. Firms in India are notorious for their poor CSR performance. Yet, the function of female family members in family enterprises’ CSR performance may add to the existing literature because the area is understudied. The same regression is repeated, except female members’ interaction terms with family measures are included. The results support the notion that including female family members has a more nuanced impact on CSR performance than their male counterparts in comparable jobs.

This study performs additional studies to investigate the function of participating family members in CSR for in-depth analysis. To begin, the propensity score matching (PSM) method tackles several issues in primary regression analysis. Compared to other methodologies, PSM eliminates a greater proportion of bias, allowing researchers to quantify treatment effects. PSM significantly benefits using a linear combination of factors for a single score; it balances treatment and control groups on multiple covariates without sacrificing many observations. The results are consistent with predictions. Finally, other studies are carried out, such as the impact of participating family members on CSR dimensions and the relationship between CSR and corporate performance.

2. Theoretical Framework and Hypothesis Development

Socio-emotional wealth (SEW) has received much attention in the family business literature [5,34] and has inspired much research on how SEW influences decision-making in family businesses. Prior research has established that SEW helps explain differences in various family firms’ strategic choices, such as acquisitions [35] and diversification [36]. According to researchers, it also influences family time horizons towards the long term [23] and shapes their R&D investment decisions [36,37] and innovation management processes [37]. SEW also has an impact on their perceptions of CSR [5], as evidenced by their investment in pollution control and prevention efforts [34]. The theory’s central claim is that family firms differ from non-family firms in that the former derive utility from non-financial aspects of business or its “affective endowment.” This affective endowment, or SEW, is made up of a variety of sources, including emotional benefits derived from association with the firm, the exercise of authority associated with the ownership of the firm, and the financial security it provides to both current and future family members [5]. Unlike non-family enterprises, where non-family owners and owner-managers use financial welfare as their primary reference point, [5] claimed that family enterprise principals use SEW to anchor their decisions. Because family owner-managers derive more subjective utility from SEW than from financial sources, [6] contend that they are willing to accept greater risks to the firm’s financial or economic well-being to avoid losing SEW. As a result, family businesses are risk seekers regarding SEW [5]. On the other hand, non-family firms are perceived as risk-averse and unwilling to bear the additional risk to preserve or benefit from other things their owners may value [12]. While the thesis that family firms act to preserve SEW has been widely elaborated in the family business research literature, it has not been empirically supported in emerging markets. The possibility that family owners or owner-managers may benefit from the financial aspects of ownership and control of their enterprises has received little attention. Thus, CSR presents an ideal scenario with the additional benefits of SEW.

CSR has evolved as a global academic and strategic debate topic [7]. Recently, CSR has been introduced in the “triple bottom” concept (people–planet–profit) [38,39,40]. The triple bottom line concept implies that a firm should be obliged to measure its social and environmental impacts—besides its financial outcomes—instead of merely concentrating on making revenue [41]. Though several studies investigate the relationship between CSR and family firms [42], the subject is context-specific, as most studies have explored the relationship between ownership structure and CSR [43,44,45].

So far, the studies have used theoretical perspectives concerned with stewardship [46,47], the social identity theory [48], financial-intermediary pressure [9], and the stakeholder perspective [9]. Only a few studies have explained the SEW and CSR association and the explanation is context-specific [49,50]. Conversely, the emerging outlook of SEW may well explain CSR in the context of family firms when it comes to participating family members [44,51,52]. This makes this study more relevant since it is believed that SEW is expected to augment explanatory power regarding CSR. Therefore, based on the premise of SEW, this study empirically investigates the role of participating members in CSR. SEW concept is more relevant for family firms because the firms have a value system that ties members together and offers a corporate context for building relations with the community and the business [53]. This provides family members with an ethical focal point that supports them in the face of encounters and hard verdicts and offers an influential platform to discriminate against them in the market [54,55]. Furthermore, a well-defined and communicated vision drives their actions. A well-defined vision is essential in modern business when ambiguity and complexity are relatively high and incremental advances are insufficient. Thus, family businesses can engage in CSR initiatives to improve their competitive advantage and influence stakeholders’ decisions in their favor [56]. As a result, a participating family member will most likely contribute to establishing goals and defined priorities.

Further, the empirical strand highlights family firm governance mechanisms. Family members serving as owners and managers provide a robust governance mechanism that moderates managerial conflicts and aligns owners’ and managers’ interests following SEW. Family firms have a common problem of information asymmetry, strong family ties, and low administrative overheads [22,46]. Widely held firms, in contrast, are associated with short-termism and the myopic behavior of corporate managers. Giovanni Agnelli (the late patriarch of the Italian industrial dynasty) quoted in Betts, 2001: “The [family] company is an inheritance to be protected and handed on. It is the outcome of the next and each generation’s commitment to the last”. Likewise, John Walton of Wal-Mart described his family’s viewpoint on their participation with Wal-Mart as follows: “We view [the company] really more as a trust, as a legacy we are responsible for, rather than something we own”. The basic notion is that the associations that bind current peers to future ones offer family firms with patient capital. Patient capital is offered by business owners who are willing to weigh present returns on investment against the long-term value and the continuance of a family business history. They emphasize making the most of long-term revenues and the longing to follow investment choices that more myopic, broadly controlled firms may not follow [57]. Because this study uses CSR as stakeholders’ perspectives that align the interests of internal stakeholders (mainly managers and owners) with those of externals, it provides family firms with a competitive advantage in pursuing CSR. The logic is compatible with the executive shared monitoring of strategic choices [41]. Family firms rely on family governance mechanisms, so they appoint more family members, thus leaving fewer board seats for independent directors than non-family firms [51,58]. So, as a strategic choice, CSR incentivizes family members as it augments their image and reputation [44]. Hence, a participating family member may be involved in socially responsible activities to pursue SEW.

An additional argument is also built for empirically testing the differential impact of family and non-family members. Family members often occupy major seats in founding-family firms that keep their stakes intact [59]. Additionally, family members influence strategic choices since they have ownership stakes from generations. Further, the participating members’ incentives vary across their ownership, role, and gender, as each prospect has different motivations to influence their role in CSR [60]. Businesses are increasingly addressing and incorporating gender equality into their CSR activities. In family firms, gender inclusion in CSR may play a dynamic role in attaining gender equality in corporate boards by providing female members equal access to job opportunities and equitable treatment through activities, initiatives, strategies, and policies [61]. Gender equality is also becoming essential at the corporate level as a vital aspect of building a CSR strategy. Concurrently, including female family members in managerial roles boosts CSR activities [62]. Based on this evidence, it appears that there is a link between gender equality and CSR. Because CSR performance is perceived as a result of board decisions, the traits and attributes of a board can be critical in obtaining better CSR results. As a result, it is critical to understand the ideas and actual evidence underlying the impact of female directors on CSR. Thus, the role of female family members in CSR may add to the existing literature. In addition, there is a need to differentiate between the roles of participating family members and participating non-family as the latter has more incentives in the participating firm’s strategic choices [63]. Moreover, the family members have economic and social stakes as they are motivated to build a publicly reliable, robust, and cost-effective firm for existing and trans-generational family members [64].

In contrast, the reputational risk may not count for non-family members, and the choices to leave the firms are always available for them, thus making their role more opportunistic and short-term [65]. CSR represents long-term investments, and any poor performance in this context may present a reputational risk for family firms. The likelihood of family members involving CSR is more robust than their counterparts [44]. Therefore, the role of family members is expected to be more pronounced when they have an ownership stake as additional motivation. Thus, we propose Hypothesis 1 and sub-hypothesis 1a as follows:

H1: 

In founding-family firms, participating family members are likely to increase CSR performance by pursuing SEW.

H1a: 

In founding-family firms, participating family members are likely to have a more prominent role in CSR performance in the pursuance of SEW than non-family members.

To further explore the argument of positive family members and CSR association, this study hypothesizes that participating family members may have more incentives and roles to play in the firm’s strategic choices when they simultaneously have ownership and managers’ roles. In family firms, a manager with ownership and control may have an incremental influence on strategic decisions because of fewer agency conflicts and search for SEW. In founding-family firms, the risk-bearing and decision-making functions are mutually held due to closely held ownership; this makes the owner’s role more vital once they serve as managers. CSR as a strategic choice presents an opportunity for participating members to opt for it because the strategy builds long-term relationships with stakeholders [66] and also creates SEW. Therefore, participating family members are postulated to augment the firm’s tendency to invest in CSR [21,67]. For empirical testing, we hypothesize that.

H1b: 

In founding-family firms, participating family members as owners and managers are likely to have a more prominent role in CSR performance in the pursuance of SEW than family owners with no managerial role.

Lastly, this study also measures the incremental role of participating female family members in CSR performance. Studies have highlighted the impact of female directors on CSR [54,68,69,70]. In brief, female participation has a more substantial alignment with CSR. Hence, this study expects that CSR practices, commonly supported by female directors [71,72], may be increased in family firms once a participating female member joins the firm. Female members are more likely to participate in the managerial decision-making process through family ties, and their role in CSR performance may be more pronounced than that of their male counterparts [73,74,75]. Women on boards improve moral and ethical decision-making; thus, having females as members in founding-family firms is increasingly part of CSR initiatives. This study hypothesizes as

H1c: 

In founding-family firms, the role of a female participating family member (member/member as owner/member as owner and manager) is more pronounced in CSR performance than her male counterpart in the pursuance of SEW.

3. Method

Sample and Methodology

The list of family firms comes from The Credit Suisse Family 1000 database. The Credit Suisse Family 1000 is an exclusive global database of a thousand companies built on a “bottom-up” basis by Credit Suisse analysts and launched in 2017. The bottom-up approach starts with the specific and progresses to the general. An approach is a viable option for a wide range of endeavors, including goal setting, budgeting, and forecasting. Analysts or entire companies may be tasked with focusing on this approach in the financial world. The firms are included in the list based on the following criteria:

• Direct shareholding by founders or descendants is 20% and above.
• Voting rights held by the founders or descendants are 20% and above.

There are several reasons for using the 2017 list of family firms. First, this report thoroughly reviews the database, and necessary amendments to the data were made where suitable. The “Family 1000” database used in last year’s update consisted of 972 companies. In the 2018 analysis, new companies were included that meet the criteria. This increases the companies to 1015 family-owned companies with a market capitalization of USD 250 million or more.

Once the firms were finalized, this study retrieved the CSR from the Thomson Reuters ASSET4 database. More than 750 data points on sustainability issues for each firm were collected, and these points were aggregated into standardized scores between 0 and 100. Due to missing CSR data, only those firms were included in the primary sample that provided CSR data from 2010 to 2021. They remained listed in the Credit Suisse Family 1000 global database after 2017. Further, the financial sector was excluded due to differential accounting treatment and the nature of assets. This resulted in a sample of non-financial listed firms. The data firms’ specific variables were obtained from Thomson Reuters. The procedure restricted this study to a sample of 1050 firm years of observation of 88 publicly listed founder-controlled firms in India.

The data regarding family member participation were collected from annual reports and IPO booklets. This study used the following criteria to identify participating members’ relationships with the family:

• The name and gender of the participating member were identified after obtaining the information from annual reports or/and IPO booklets. In the IPO booklet, the regulatory authority requires the firms to disclose information regarding participating members in India.
• Regulations also require firms to disclose the transfer and transmission of shares. Therefore, this study obtained relevant information from the transfer and transmission of share announcements.
• For further clarification, this study also traced the turnover of members (owners, board members, and managers) to monitor the entry and exit of family members released in annual reports. This helped researchers to have an in-depth review of participating family members.
• There were many cases where a participating member’s identity had not been disclosed. This study also employed search engines (Google, LinkedIn, and Baidu) that helped to pinpoint any family associations for participating family members to identify the relationship between founding family members and participating family members. Further, an individual’s surname in India commonly reflects community, family, caste, or village of origin. This helped the researchers to find out the family association.
• The information from annual reports was obtained to differentiate members. A member performs functions such as a stockholder of a corporation. At the same time, a manager is principally the director and is involved in strategic decision-making. Based on role differentiation, the members were divided into managers and owners, not-managers.

The process restricted the dataset to 88 non-financial firms for the selected period. The description of family members is provided in

Table 1. Description of the dataset—participating family members.

		Family Members			Non-Family Members			Owner Not Manager			Owner and Manager
Year	Firms	Overall	Female		Overall	Female		Overall	Female		Overall	Female
			Member	Percentage		Member	Percentage		Member	Percentage		Member	Percentage
2009	88	580	131	22.586	203	29	14.286	180	49	27.222	400	82	20.500
2010	88	586	146	24.915	215	47	21.860	187	61	32.620	399	85	21.303
2011	88	586	143	24.403	209	49	23.445	187	43	22.995	399	100	25.063
2012	88	582	167	28.694	214	29	13.551	192	78	40.625	390	89	22.821
2013	88	588	152	25.850	209	33	15.789	193	45	23.316	395	107	27.089
2014	88	591	167	28.257	211	46	21.801	190	68	35.789	401	99	24.688
2015	88	591	169	28.596	211	46	21.801	196	82	41.837	395	87	22.025
2016	88	590	170	28.814	212	54	25.472	192	73	38.021	398	97	24.372
2017	88	594	177	29.798	209	63	30.144	192	81	42.188	402	96	23.881
2018	88	595	194	32.605	213	65	30.516	198	82	41.414	397	112	28.212
2019	88	596	201	33.725	214	53	24.766	198	81	40.909	398	120	30.151
2020	88	594	200	33.670	214	41	19.159	199	79	39.698	395	121	30.633
2021	88	602	202	33.555	215	55	25.581	199	81	40.704	403	121	30.025
Total	88	7675	2219	28.912	2749	610	22.190	2503	903	36.077	5172	1316	25.445

below. The year-wise data description indicates the participating family members’ categories in relative terms and percentage-wise. The overall member trend is between 580 members and 602 members. Female participation has increased since 2013, and the increase may be attributed to concerns raised by authorities regarding female involvement and the announcement of a female quota in India. The firms must have at least one female director on their corporate board. Among the three categories of family members, owners as managers have a significantly higher proportion than owners not managers and only members.

In

Table 2. Patterns of participating family members.

	Number of Firms	Percentage of Firms	Total Members
x ≤ 3	6	6.818	16
3 < x ≤ 4	156	177.273	624
4 < x = 5	198	225.000	990
<5 < x = 6	168	190.909	1008
<6 < x = 7	203	230.682	1421
<7 < x = 8	210	238.636	1680
8 < x = 9	148	168.182	1332
9 < x = 10	19	21.591	190
10 < x = 11	16	18.182	176
11 < x = 12	9	10.227	108
Above 12	10	11.364	130
Total			7675

Note: The pattern of family members is provided. The percentage is calculated based on the presence of the number of members divided by sample firms (88 firms).

, the pattern of participants is also shown. The pattern indicates that seven members present the pattern, followed by six (6) members. Further in

Table 3. Descriptive statistics, VIF, and correlation matrix.

Variable	Mean	Max	Min	S/D	VIF	1	2	3	4	5	6	7	8
CSR (1)	58.21	89.48	29.06	14.62	3.27	1.00
Environment score (2)	49.66	78.70	18.05	17.27	2.17	0.97	1.00
Social score (3)	59.65	74.29	23.16	17.74	2.94	0.88	0.76	1.00
Governance score (4)	77.72	92.15	32.06	8.48	3.26	0.78	0.69	0.65	1.00
Family member (5)	6.71	23.00	3.00	1.92	2.86	0.06	0.07	0.14	0.04	1.00
Non-family member (6)	2.48	7.00	1.00	0.92	1.85	0.05	0.06	0.09	0.06	0.22	1.00
Owner not manager (7)	2.12	6.00	2.00	0.83	1.67	−0.07	−0.08	−0.01	−0.05	0.10	0.25	1.00
Owner-managers (8)	4.61	16.00	2.00	0.79	1.58	0.04	0.02	0.04	0.12	0.59	0.23	0.17	1.00
CEO-AGE (9)	45.48	57.00	32.48	0.54	1.08	−0.03	−0.02	−0.02	−0.04	−0.13	0.02	−0.04	−0.15
Board meeting (10)	10.29	16.0	5.00	1.68	3.36	0.09	0.08	0.07	0.09	0.01	0.01	0.11	0.04
B-interlock (11)	0.33	1.00	0.00	0.47	3.94	0.11	0.08	0.16	0.08	0.03	0.13	0.11	0.01
Firm age (12)	51.64	76.00	28.00	4.33	2.67	0.28	0.25	0.29	0.23	0.04	−0.05	0.14	0.18
Firm size (13)	12.31	17.22	5.03	1.48	2.96	0.55	0.52	0.48	0.5	−0.04	−0.14	−0.1	0.08
Firm visibility (14)	0.02	0.12	0.01	0.15	0.01	0.23	0.21	0.2	0.26	−0.09	−0.15	−0.03	0.12
ROA (15)	10.67	22.37	2.18	7.65	3.32	0.16	0.14	0.14	0.12	−0.09	0.05	0.14	−0.17
Financial leverage (16)	1.94	2.75	1.68	1.05	2.09	−0.22	−0.33	0.41	−0.31	0.08	−0.11	−0.03	−0.12
Variable						9	10	11	12	13	14	15	16
CEO-AGE (9)						1.00
Board meeting (10)						0.03	1.00
B-interlock (11)						−0.09	−0.11	1.00
Firm age (12)						−0.03	0.03	0.06	1.00
Firm size (13)						−0.12	0.16	−0.08	0.34	1.00
Firm visibility (14)						0.04	0.07	−0.13	0.18	0.39	1.00
ROA (15)						0.03	−0.09	−0.12	−0.19	−0.46	−0.43	1.00
Financial leverage (16)						−0.04	−0.02	−0.09	0.04	0.05	0.07	−0.16	1.00

Note: min = minimum, max = maximum, S/D = standard deviation, VIF = variance inflation factors. All these variables are defined in Appendix A Table A1.

are the descriptive statistics, variance inflation factor (VIF), and correlation matrix of variables. The VIF values show that there is no issue of multicollinearity among variables. VIF measures the amount of multicollinearity in a set of multiple regression variables. The value of VIF is far below the maximum level of 10. For further clarity, this study also presented a correlation between variables. In descriptive statistics, the mean and standard deviation of variables is provided.

4. Empirical Model

Prior studies have used several regression techniques to empirically test the association between board members’ attributes and CSR. In this vein, [42] used the ordinary least-squares method to observe the impact of financial reporting conservatism on CSR. Likewise, [3] used the three-way fixed-effect model to explore the determinants of the disclosure of biodiversity initiatives. However, these methods do not consider the potential problems of endogeneity. Endogeneity has severe consequences for estimates. In endogeneity, OLS and panel models (fixed- and random-effect) can produce biased and inconsistent parameter estimates. Resultantly, hypothesis tests can be deceptive or misleading. Altogether, only one endogenous variable could seriously distort the estimates of these models. Thus, this study moves from a static panel data analysis to a dynamic panel data analysis. The static model ignores unobserved time-variant effects and the endogeneity property of the dependent variable, resulting in inconsistent estimates. To account for dynamic effects, the dynamic panel data analysis assumes a correlation between the lagged dependent variable and the random disturbance term of the model [76]. This study adopts the [76] dynamic panel model based on the generalized method of moments to consider the dynamic nature of the relationship between the variables and control the endogeneity bias. The lagged value of the dependent variable is then introduced as an independent variable (GMM). Therefore, this study uses a generalized two-step method of moments (GMM) to address the concern. The GMM estimation technique for dynamic panels yields a more robust result than any other estimation. The GMM estimation is applied based on the following points:

6.

The independent variables are not exogenous;

7.

It solves heteroscedasticity and autocorrelation problems;

8.

It allows researchers to overcome the problem of weak instruments.

This study uses the following pre-diagnostic tests:

9.

Wooldridge test for the presence of autocorrelation.

10.

White/Koenker test for the presence of heteroscedasticity.

11.

Wu–Hausman test for the presence of endogeneity.

Additionally, the following post-diagnostic tests are also used:

12.

The estimates of AR (1) and AR (2) tests for the presence and absence of autocorrelation at AR (1) and AR (2), respectively.

13.

Hansen’s J-test checks are used to check the validity of instruments.

14.

Wald statistics are used to check the model’s fitness.

The following regression model tests the association between family participants and CSR:

$$\begin{array}{c}{CSR}_{i,t}={{\beta }_{0}CSR}_{I,t-1}+{{\beta }_{1}family members}_{i,t}+{{\beta }_{2}control factors}_{i,t}+\\ {{\beta }_{3}year dummy}_{i,t}+{{\beta }_{4}industry dummy}_{i,t}+{\epsilon }_{i,t}\end{array}$$

(1)

In Equation (1), ${CSR}_{i,t}$ is the dependent variable for firm I in year t. The independent variable ${CSR}_{I,t-1}$ represents the lag of the dependent variable for the firm I in year t − 1. Control factors inc8lude firm and board characteristics. Similarly, the year and industry effect is also used to control for finding trends in years and industry. All these variables are defined in Appendix A. A similar regression model is used for each construct of members.

For interaction terms with female members, the following regression model is used:

$$\begin{array}{c}{CSR}_{i,t}={{\beta }_{0}CSR}_{I,t-1}+{{\beta }_{1}family members}_{i,t}+{{\beta }_{2}family members\times female}_{i,t}+\\ {{\beta }_{2}control factors}_{i,t}+{{\beta }_{3}year dummy}_{i,t}+{{\beta }_{4}industry dummy}_{i,t}+{\epsilon }_{i,t}\end{array}$$

(2)

In Equation (2), the interaction term is a variable of concern. For each construct of members, this study uses separate regression—analyses performed using the software package EViews-9.

5. Results and Discussion

The dynamic panel model assumes that the random disturbance term is highly correlated with the lagged dependent variable, thus accounting for dynamic effects [76]. This study uses a two-step GMM estimation technique to address the endogeneity bias. Further, it also addresses the concern of the dynamism of the association between the variables. The Arellano–Bond test for autocorrelation and Sargan over-identification test also confirm the presence of autocorrelation. AR (1) and Sargan tests validate the number of instruments used in the primary model [76]. The other pre- and post-diagnostic tests also confirm the current study’s validity of the GMM model.

The findings of the baseline regression are reported in

Table 4. Family member and CSR (two-step-system GMM regression).

	1	2	3	4	5	6	7	8
CSR(t − 1)	0.691 ***	0.723 ***	0.701 ***	0.699 ***	0.728 ***	0.684 ***	0.696 ***	0.733 ***
Family members	0.087 *
Non-family members		0.049 *
Δ in β between family members and non-family members (1-2)		F = 5.152 **
Owners-not-managers			0.028 *
Owners as managers				0.073 **
Δ in β between Owner*managers and Owners-not-managers (column 5-4)				F = 9.26 **
Family-members*female					0.089 *
Non-family members *female						0.026 *
Owners-not-managers*female							0.044 *
Owners*managers*female								0.135 ***
Δ in β between Family-members*female and Family-members (column 5-1)					3.05 **
Δ in β between only members*female and Only members (columns 6-2)						F = 2.19 *
Δ in β between Owners-not-managers*female and Owners-not-managers (column 7-3)							F = 13.11 **
Δ in β between Owners as managers*female and Owners as managers (columns 8-4)								F = 16.08 ***
Board characteristics
CEO duality (1/0)	0.008 *	0.010 *	0.007 *	0.010 *	0.009 *	0.011 *	0.007 *	0.012 *
CEO age	−0.003	−0.002	−0.001	−0.004	−0.006	−0.005	−0.005	−0.006
CEO interlock (1/0)	0.086 **	0.088 **	0.089 **	0.091 **	0.092 **	0.084 **	0.079 **	0.078 **
Board meeting frequency	0.053 **	0.044 **	0.065 **	0.046 **	0.061 **	0.049 **	0.059 **	0.043 **
Financial characteristics
Firm size	0.052 ***	0.074 **	0.055 ***	0.066 ***	0.061 ***	0.065 **	0.069 ***	0.056 ***
Firm age	0.037 ***	0.038 **	0.039 ***	0.034 **	0.035 ***	0.019 ***	0.036 **	0.033 **
ROA	0.051 **	0.052 **	0.062	0.055 **	0.066 **	0.048 **	0.050 **	0.065 **
Financial leverage	−0.023 **	−0.023 **	−0.024 **	−0.021 **	−0.021 **	−0.022 **	−0.030 **	−0.019 **
Firm visibility	0.028 **	0.029 **	0.030 **	0.036 **	0.026 **	0.027 **	0.033 *	0.031 **
Year fixed effect	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry fixed effect	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
AR (1) (p-value)	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000
AR (2) p-value	0.278	0.160	0.256	0.142	0.231	0.222	0.302	0.318
Hansen p-value	0.143	0.181	0.208	0.232	0.209	0.242	0.244	0.217
Diff-in-Hansen test for exogeneity	0.455	0.517	0.499	0.522	0.516	0.526	0.482	0.411
Wooldridge p-value	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000
Wu–Hausman p-value	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000
White/Koenker p-value	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000

Note: For each firm, this study used a separate model. The variables are defined in Appendix A. The interaction terms of a female with other constructs of participants are also tested. p < 0.10 is represented by *. p < 0.05 is represented by **. p < 0.01 is represented by ***.

below. First, the lag of the dependent variable (CSR(t − 1)) is positive and statistically significant (p < 0.01). The coefficient estimates of the CSR(t − 1) show that the lag value of CSR explains nearly 70% of CSR performance in the current year. Further, family members are positively associated with CSR as the estimated coefficient is positive and statistically significant at a 10% significance level (refer to model 1 in Table 4). In line with Hypothesis 1, more family members improve CSR performance. In economic terms, the coefficient estimate of family members has a value of 0.087, implying that family members’ participation increases CSR performance by 8.7%, which is a significant economic effect in the current study.

For an in-depth view, the sub-hypotheses are also constructed. Hypothesis 1a states that in founding-family firms, participating family members are likely to have more influence on CSR performance than non-family members in the pursuance of SEW [60]. This study first estimates the direct impact of non-family members on CSR and finds positive and statistically significant effects of non-family members on CSR (β = 0.049 and p < 0.10; refer to model 2 in Table 4). [77] argued that only regression output is insufficient to conclude the significance of predictors’ coefficient estimates without identifying which predictor explains the model better. Therefore, the study emphasized testing the significance of coefficients compared to each other, which differs from zero. So, based on these views, it is appropriate to test the significant differences between the coefficients of the variables of concern. This study applied F-test to check the significance of differences among the coefficient estimates. Therefore, the difference in coefficient estimates between family members and non-family members is a variable of concern to test Hypothesis 1a. The difference between coefficient estimates depicts a positive and statistically significant difference between family and non-family members, implying that the role of family members is more pronounced than that of non-family members (f = 5.152 and p < 0.05; refer to model 2 in Table 4). Thus, Hypothesis 1a is supported. The role may be attributed to several family-specific factors. Each employee in a family business is probably committed to the same values and guiding principles. This gives the family business more tenacity, arrogance, and competitive advantage [74]. Family members should make the extra effort necessary to make long-term strategic decisions such as CSR because they share certain values [42]

Moreover, family businesses that strongly emphasize their CSR role also exhibit greater financial sacrifice. Families’ positions are more nuanced in CSR because they complement one another in strategic decisions. This supports the idea that relatives have stronger incentives to oversee delegated managers than nonrelatives. Furthermore, because they are more knowledgeable about the company and the management than non-family members who are not in managerial positions, family managers are more effective peer monitors of their peers.

In addition, the owners are also grouped into owners not managers and owners as managers. The findings show that owners not managers and owners as managers have positive and statistically significant coefficient estimates (p < 0.10 for owners not managers, refer to model 4; p < 0.05 for owners as managers, refer to model 5). The findings show that the coefficient estimate of owners not managers is 0.028, which is comparatively lower than family owners (β = 0.073). In comparison, the coefficient estimate of owners as managers is higher both in terms of the level of significance and coefficient estimates, implying that owners as managers have incentives to get involved in management, and their role is more pronounced in CSR [25]. The findings support Hypothesis 1b, which implies that the role of owners is more apparent than the member’s role, as owners have more incentives to participate in strategic choices to preserve SEW [67]. To further support Hypothesis 1b, the difference in the coefficient estimate of owners as managers and owners not managers are also calculated. The coefficient estimate of owners as managers is significantly higher than that of owners not managers (F = 9.26 **; refer to model 5), indicating 9.26% increment effects once family managers have stock ownership. The findings show significant differences between both variables of concern, implying that owners having the role of managers contribute more to CSR in founding-family firms. Thus, Hypothesis 1b is further supported. This supports the idea that family owners are likely to make decisions when aiming for SEW, even if it has a negative financial impact [78]. The findings of the empirical investigation are consistent with the information advantage and ownership incentives of family members who are owners in preventing conflicts of interest.

For a further in-depth view of the relationship between family members and CSR, this study introduces females as interaction terms with dependent variables to explore any incremental role a female plays in the context of CSR. As mentioned earlier, females are comparatively more motivated in social aspects, and their role is vital as they are more participative and proactive in decision-making [79]. So, the interaction terms are introduced to capture any incremental impact on CSR. The findings show that all the interaction terms between family and non-family members and females are positive and statistically significant (refer to models 5 to 8). Importantly, in the context of the incremental benefits of having females on corporate boards, the findings show that all interaction terms have significantly higher coefficient estimates than their direct impact on CSR. In relative terms, the interaction term between owners as managers and females has the highest coefficient estimate and significance level for its association with CSR. The differential impact through the change in coefficient estimates is also calculated to support the argument. As per the findings of differential impact (change in coefficient estimates) reported in models 5 to 8, the coefficient estimates of all interaction terms with a female are significantly higher than the direct impact of the variables. According to the research, gender diversity moderates the relationship between family member constructs and CSR’s positive relationship [8,33]. However, the coefficient estimate difference between owners as managers*female and owners as managers is significant at 1%, which is comparatively higher than any other interaction term in Table 4 below. One of the most pertinent issues currently being raised by various stakeholders is how female managers affect the effectiveness of the corporate board in terms of ethical behaviour [50]. The findings support this claim [80]. According to the evidence, women also contribute more to group decision-making and follow moral principles [81]. They reduce board conflicts and enhance CSR due to their diligence and responsible oversight [75]. Female family members who participate in stakeholder discussions align with internal and external stakeholders’ interests, and their participation improves family businesses’ CSR performance.

The estimated coefficients are primarily consistent with earlier studies regarding the control factors. The CEO duality coefficient estimate is statistically significant and positive at 10%. Family businesses are less likely to experience agency conflicts because management and shareholders’ interests are aligned. CEO duality has a favourable impact on CSR, in contrast to earlier findings [82]. The results could be explained by the management’s and shareholders’ shared interests.

Additionally, the CEO is more drawn to social identity due to perspectives on social norms and modest capital [83]. According to this theory, this study discovers a beneficial relationship between CEO duality and CSR. Although statistically insignificant, the CEO tenure coefficient estimate is positive. CEO tenure in family businesses has little impact on CSR performance in developing economies. A board interlock occurs when a member of one organization serves on the board of directors of another. Since managerial actions are at the forefront of developing CSR policy and strategy, the current global CSR concerns call for an urgent solution through their combined efforts [72]. Board interlocks could be a novel way for corporations to overcome long-standing barriers to implementing CSR practices within their organizations. However, the success of these decisions depends on the CSR objectives established by family businesses (Garca-Sánchez et al., 2021). Once the company is prepared to select the suggested strategies, interlocking directors may bring about changes [3,84]. These arguments are supported by this study’s exploration of a positive and statistically significant coefficient estimate of CEO interlock, which suggests that CEO board interlock results in substantial changes in CSR. Board meeting frequency among the corporate governance factors is positive and statistically significant at the 5% level, demonstrating the efficacy of governance structures in family businesses [76,85].

Lastly, firm-specific variables are also considered to manage any impact they may have on the relationship between family members and CSR performance. Firm size is linked to CSR, according to the coefficient estimate of firm size, which is positive and significant at the 1% level. Large companies can allocate more resources to non-financial strategies such as CSR, and it is clear that managerial effectiveness links CSR to long-term firm value [33]. The argument is further supported by the average age of a firm, which indicates that these companies have a long history of remaining competitive in the market and gradually increasing their market share. The correlation estimates between firm age and ROA are also positive and statistically significant at 5% [84]. The positive effects of firm age and ROA on CSR support a similar logic. Mature and profitable firms are likely to increase their CSR in pursuit of legitimacy in the market (Garca-Sánchez et al., 2021). At the 5% level, the coefficient estimate of financial leverage is statistically significant and negative. This is consistent with the idea that greater leverage restricts the use of resources in a discretionary manner and limits CSR as a tactical managerial option [34]; Garca-Sánchez et al., 2021). The final results show a positive and statistically significant coefficient estimate for firm visibility at the 5% level. This supports the idea that firms more visible in the market are more likely to adopt CSR as a strategic choice because these companies are under more pressure from the public’s scrutiny. These businesses have incentives to choose CSR as a strategic option because of their high market exposure, as evidenced by the strong correlation between CSR and stock performance [86]. Additionally, year and industry fixed effects are included to control any unobservable variations in the relationship between independent and dependent variables brought on by year or industry.

Propensity Score Matching (PSM)

One can raise the concern that a change in family participation may be caused by an event that may impact CSR. For this purpose, each family firm is matched with non-family firms. This study uses propensity score matching (PSM) to justify the main findings. PSM reduces any overlooked variables that may have instantly influenced post-period and CSR [10,87]. For PSM, the probit model is used. For the probit model, the dependent dummy is created, equal to 1 if a firm observes an increase in family members in year t and 0 otherwise. In probit regression, the independent variables are included that may impact a member’s decision to join the firm. This study uses profitability (ROA), firm size, and board independence as matching criteria for both groups of firms. Once the firms are matched, the firms are pooled together. For analysis purposes, it is required that the matched sample should have data two years before (t − 2 and t − 1) and two years after (t + 1 and t + 2) the event (change in a family member). This resulted in sample-A with 124 firm-year observations (including 62 treatment firms and 62 matched firms). The findings are reported in

Table 5. Results of Propensity Score Matching Samples.

	Treatment Firms		Matched Sample
	Coefficient	Standard Error	Coefficient	Standard Error
CSR(t − 1)	0.703 ***	[0.1923]	0.6615 ***	[0.1693]
Δ Family members	0.055 **	[0.0258]	0.046 **	[0.0216]
CEO-specific factors
CEO duality (1/0)	0.039 *	[0.0215]	0.041 *	[0.0227]
CEO age	0.003	[0.0028]	0.011	[0.0104]
CEO interlock (1/0)	0.092 **	[0.0416]	0.099 **	[0.0448]
Board-specific factors
Δ Board meeting frequency	0.057 **	[0.0286]	0.047 **	[0.0236]
Financial control
Δ Firm size	0.056 ***	[0.0171]	0.079 ***	[0.0241]
Firm age	0.040 ***	[0.0080]	0.041 **	[0.0082]
Δ ROA	0.055 **	[0.0252]	0.056 **	[0.0257]
Δ Financial leverage	−0.025 **	[0.0108]	−0.025 **	[0.0108]
Δ Firm visibility	0.030 **	[0.0131]	0.031 **	[0.0135]
Year fixed effect	Yes		Yes
Industry fixed effect	Yes		Yes

Note: The table reports the findings of the sample based on PSM sub-samples. Δ represents any increase in variables. Robust standard errors are presented in parentheses. All variables are defined in Appendix A. p < 0.10 is represented by *. p < 0.05 is represented by **. p < 0.01 is represented by ***.

below. The findings show that an increase in family members is positively associated with CSR in both samples, implying that adding family members improves CSR performance in founding-family firms (p < 0.05, refer to Table 5). This aligns with the anticipation that any increase in family members boosts CSR performance. The results of other variables are also consistent with expectations.

6. Additional Tests

Several additional tests are performed. These are as follows.

Family Members and CSR Dimensions

CSR dimensions have different implications, and each dimension may have different explanatory power [88,89]. Using data from Thomson Reuters, this study relies on environmental, social, and governance scores as proxy measures of the extent to which family members engage in CSR activities. The constructs of the main independent variable (family members) are regressed with each dimension of CSR for an in-depth insight into the main findings. Importantly, regressions are run separately for each family construct, and the results are summarized in

Table 6. Family members and CSR dimensions.

		Column-1	Column-2	Column-3
		Environmental Score	Social Score	Corporate Governance Score
CSR(t − 1)		0.742 ***	0.776 ***	0.752 ***
Family members		0.037 *	0.029 *	0.013 *
Non-family members		0.025 *	0.016	0.003
Owners not managers		0.068 **	0.027 *	0.022 *
Owners as managers		0.072 **	0.051 **	0.030 **
Owners as managers X female		0.111 ***	0.044 **	0.103 **
Δ in β between Family-members
Family members	(columns 1-2)	F = 1.224
(columns 2-3)			F = 1.023
(columns 1-3)				F = 1.362
2. Non-family members	(columns 1-2)	F = 2.222
(columns 2-3)			F = 1.002
(columns 1-3)				F = 1.528
3. Owners-not-managers	(columns 1-2)	F = 3.011 *
(columns 2-3)			F=1.966
(columns 1-3)				F = 4.182 **
4. Owners as managers	(columns 1-2)	F = 3.602 *
(columns 2-3)			F = 2.343
(columns 1-3)				F = 3.092 **
5. Owners as managers X female	(columns 1-2)	F = 3.166 *
(columns 2-3)			F = 2.200
(columns 1-3)				F = 6.404 **
Board-specific factors
Board meeting frequency		0.060 **	0.049 **	0.074 **
Financial control
Firm size		0.059 ***	0.080 **	0.064 ***
Firm age		0.042 **	0.043 **	0.044 **
ROA		0.058 **	0.061 **	0.069 **
Financial leverage		−0.026 **	−0.026 **	−0.027 **
Firm visibility		0.032 **	0.033 **	0.046 **
Year fixed effect		Yes	Yes	Yes
AR (2) p-value		0.263	0.152	0.242
Hansen p-value		0.136	0.172	0.197
Diff-in-Hansen test for exogeneity		0.470	0.533	0.515
Wooldridge p-value		0.000	0.000	0.000
Wu–Hausman p-value		0.000	0.000	0.000
White/Koenker p-value		0.000	0.000	0.000

Note: In this table, the summarized findings are presented. Each model is run separately. Control factors are reported from the first model, where family members are variables of concern. However, in other models, the control factors have a similar association with CSR as in the first model, except for minor variations in coefficient estimates. The variables are defined in index A. The interaction terms of a female with other constructs of participants are also tested. The other interaction term between members and females are also significant. For brevity purposes, only one interaction term is provided. Results can be provided on request. All the pre-diagnostic and post-diagnostic tests are for each model. p < 0.10 is represented by *. p < 0.05 is represented by **. p < 0.01 is represented by ***.

below. In Table 6, the variables of concern are the direct impact of family members and their differences in coefficient estimates. The results show a positive and statistically significant association between family members and CSR dimensions (environment, social, and governance) (p < 0.10). The differences in coefficient estimates are also tested to validate the argument. The empirical findings show no significant differences among the three dimensions for family members. The results imply that family members improve CSR performance, and their role is equally crucial for all three dimensions.

Among the constructs of family members, non-family members are significantly associated with the CSR environment only (p < 0.10), implying that non-family members only play an important role in improving environment performance. Again, this study finds no significant difference in coefficient estimates for non-family members among the three dimensions of CSR. The findings may imply that non-family members play an essential role in improving environmental performance. However, family members as owners are positively and significantly associated with CRS dimensions. Further, the differences in the coefficient estimates of family owners show comparatively different implications. The differences in coefficient estimates show that family owners value environmental performance over social and governance performances, as the coefficient estimate of association with environmental performance is significantly different from the other two dimensions.

Moreover, owners as managers and owners as managers X female have a statistically significant association with CSR dimensions. Their differences in coefficient estimates between environment and social score and environment and corporate governance are also significantly higher, signifying the importance of the environmental performance of family firms. From these findings, a different conclusion can be drawn. First, family members positively affect firms’ CSR dimensions in general, except only members who have an insignificant association with social and governance performance. Second, the differences in coefficient estimates show that family owners, owners-managers, and owners-managers X female have an incremental impact on environmental performance compared to the other two dimensions. Lastly, corporate governance is the last area of their attention as the findings show higher coefficient estimates for different dimensions in magnitude and significance. The results may be supported by an upward trend in regulatory enforcement, which various factors can explain. For instance, it has been mandatory for firms in multiple states to install continuous online emissions/effluent monitoring systems, which gives the State Pollution Control Boards (SPCBs) the needed information to observe compliance in their jurisdiction.

Additionally, the Central Supreme Court, the state high courts, and the numerous benches throughout the county of the National Green Tribunal (NGT) strictly monitor the implementation and enforcement of environmental laws. Thus, the firms oblige to environmental scores more than other dimensions. Further, the relation can be supported through the social identity view, which states that family firms pay comparatively more courtesy to non-economic objectives, such as family repute and image, and pay more attention to the long-term strategies to preserve SEW [37,90]. The idea is consistent with the sustainable development objectives of environmental protection. Thus, family firms are more likely to increase environmental performance.

7. Conclusions

This study, which is based on the premise of SEW, investigates the influence that family members have on CSR in founding-family businesses. According to the study findings, family members’ participation in founding-family businesses improves the firms’ CSR performance. The premise of SEW is more pronounced in family firms [60]. According to the study’s findings, which use a panel dataset, the participation of family members in the pursuit of SEW increases CSR. The primary purpose of this study is to broaden the scope of the CSR thesis presented by SEW to include broader CSR performance in founding-family businesses operating in India’s emerging economy. Because founding-family firms in India are more involved in CSR to pursue SEW, the border condition of theorization is directed towards those firms. This is compared to publicly managed companies, which are less likely to do so. The construction of sub-hypotheses is done to improve clarity. This research adopts four proxy measures of members—non-family members, family owners not managers, family owners as managers, and female members—to represent SEW. Since there is a positive and statistically significant difference between the coefficient estimates of family members and non-family members, Hypothesis 1a is supported. Thus, the logic of SEW is supported because the role of family members is more pronounced than non-family members. Likewise, the difference in coefficient estimates between owners and owners not managers is also positive and statistically significant. This implies that owners as managers have more incentives to be involved in CSR as a strategic choice, thereby supporting Hypothesis 1b. Lastly, female family members moderate the positive relationship between family members and CSR, thus supporting Hypothesis 1c.

In a nutshell, the findings lend credence to the reasoning behind SEW because the participation of family members improves CSR performance. However, the relationship is more robust when participating members join as owners and managers since they have incentives and advantages in adopting CSR as a strategic choice. In addition, the correlation is strengthened when the participating owners are women who also take on management responsibilities. The findings show that the intra-family enforcement effects are more pronounced when participating members have the firm’s ownership and managerial positions. Female family members augment the impact. According to further studies, the effects of intra-family enforcement on environmental performance are amplified when the participating members hold managerial and ownership positions in the business [42]. The effect will be amplified if the member in question is female.

The research contributes to the role of an essential business segment, i.e., family firms. Though professionally managed firms have been around for decades, family businesses are the mainstay of the economy. In India, family businesses contribute about 79 percent of the national GDP annually, showing family businesses’ importance. This study highlights the role of family businesses in upgrading CSR in India’s emerging economy. It opens a new insight into CSR perspectives in the context of participating family members. Additionally, this research adds to the existing CSR literature by emphasizing the significance of family firm heterogeneity in determining a firm’s CSR activities. It focuses on four family firm features potentially related to CSR: family members, owners not managers, owners as managers, and females as owners and managers. Because the participating family members have incentives in CSR, their role separation may add to the exiting literature as this study finds significant differences in their effect according to their roles. The findings provide a new dimension to the existing research. Additionally, the research has several managerial implications. First, the family firms’ members may act as corporate stewards and are more engaged in the socioeconomic wealth generated by CSR initiatives. Thus, family firms exposed to high levels of CSR concerns should appoint female participating family members to reduce the conflict. Second, the stakeholders could view our findings as a premise to enforce the CSR perspective in poorly CSR-ranked firms.

This study aims to give stakeholders theoretical and practical consequences in the CSR of family businesses. However, there are certain limits. First, this study is context-specific (India). Therefore, one should be careful in generalizing the current study’s findings. Second, a specific criterion is used to categorize family firms (20% ownership and voting right). There are other relative measures to classify family firms. It may not be comparable to other studies that employ different definitions and data sources.

In future research, this study encourages empirically investigating other economies’ relationships. This may help to visualize the role of the family business in CSR in another economic context. Additionally, there is a need to investigate the intra-family enforcement effects on other governance-related issues such as dividend payout, information asymmetry, and the moderating role of the external environment in the association of intra-family enforcement effects on CSR and related outcomes.