Is venture capital socially responsible? Exploring the imprinting effect of VC funding on CSR practices

Abstract

We study how corporate social responsibility (CSR) is guided by ownership history, specifically whether a company receives venture capital (VC) funding or not. We argue that companies that receive VC funding are less likely to adopt CSR practices due to unique VC imprinting and that temporal and investment orientation moderate this relationship. We find that VC-backed companies have poorer CSR records, which do improve over time, but at a comparatively slower rate than non-VC-backed companies. However, when VC-backed companies receive funding from VC firms that have a responsible investment orientation and a broader stakeholder view, their CSR records are significantly better. This study contributes to our understanding of imprinting boundaries and related repercussions in stakeholder management strategies.