**Table 2.**

*Studies using theoretical perspectives.*

Ikram et al. [70] have used mixed theories. Only few of the above-mentioned studies have interpreted the findings according to theory. The studies by Syed & Butt [60]; Butt & Butt [57]; Khan et al. [65] and Ikram et al. [70] are prominent to have interpreted the findings according to the theory. This implies that theorizing the CSR research needs greater attention by the researchers.

### **3. Theories in CSR scholarship**

The CSR reporting motives in the developing economies are less researched [88, 89]. The CSR research in developing economies, experiencing growth may rely on theories being used in developed economies [14]. The earlier studies emphasizing theories of managerial motivations [89–92] have been studied in detail for inclusion of theories related to CSR along with book chapters of Freeman [93]; Visser et al. [94]; Jamali [13]. We provide an overview of generally applied theories in CSR scholarship that are legitimacy theory, stakeholder theory, signaling theory, institutional theory, slack resources theory, agency theory and the resource-based view.

#### **3.1 The legitimacy theory**

In order to be considered as legitimate, corporations are required to be responsive to the social expectations of the society at large. There is a social contract between business and the society that is central to understand the organizational legitimacy [90]. To ensure their continuous existence and deriving favor from society, the organizations use CSR reporting as a tool however the frequency and extent of reporting may differ across economies [95]. This is done in an endeavor to achieve legitimacy. Legitimacy theory can be an explanatory factor for CSR disclosure [89, 96]. Organizations continue voluntary reporting to ensure their legitimacy. In CSR research about the organizations, a legitimacy explanation can be given after a thorough examination of the disclosure and changes in it [97]. The motivation of firms for issuing standalone CSR reports is consistent with legitimacy theory [98].

#### **3.2 The stakeholders theory**

There has been a natural fit between the idea of CSR and stakeholders of an organization [9] and CSR leaves positive impact on its stakeholders [5]. The organizations have responsibilities to multiple stakeholders, and this is what propagated by stakeholder theory [93]. Organizations are not only responsible to themselves but also to the other stakeholders which can affect or can be affected by the organization ([93] p. 25; [99]). Edward Freeman is regarded as "father of the stakeholder's theory". The theory attracted broad appeal from researchers and writers and continues to attract attention [92]. Stakeholder's theory asserts that an active role of business in the society is required towards selective stakeholders rather towards society. The stakeholder's theory is about managing all the groups and individuals who have an influence on the continuity of the organization [100]. Organizations may perform stakeholder analyses and the activities of corporations must be determined which may affect the groups of stakeholders [101].

#### **3.3 The signaling theory**

In the developing economies, firms may be in competition for resources to generally show their superiority over the others. CSR is used to signal the

investors in the emerging economies [102] to enhance favorable reputation [103]. Likewise, this is done in an endeavor to decrease the information asymmetry between the firms and the relevant stakeholders providing financial benefit to the firm [104, 105]. The obtained third-party private certification is used as a signal to the government of the compliance with the management standards [105]. Companies issue CSR reports to signal their concerns regarding social and environmental issues and ensure the benefit of stakeholders' awareness of the companies' handling these issues [106].

### **3.4 The institutional theory**

The organizations can be viewed in the context of institutional theory. There may be a difference in the impact of national institutional context on CSR. The rationalized institutional rules and the environment results in isomorphic organizational structures [107]. The isomorphism can be coercive, mimetic or normative. In the defined institutional environment, the firm's strategies and practices will become similar due to the similar pressure being faced [91].

The shape of corporate agency may be in the form of voluntary policies or programs in Anglo-Saxon context and is shaped by legal, religious, cultural, political systems, socioeconomic systems, customary or other defined institutions in other contexts [13, 108]. The CSR in developing countries is formed by the pressures being exerted by institutional factors which consider philanthropic part only as the core concept [13].

#### **3.5 The slack resources theory**

There is a positive relationship between slack resources and firms' financial performance [109]. Slack resources theory explains the availability of enough resources with the firms which enable these firms to invest in the social performance activities. The allocation of slack resources to social performance domain results in a better social performance [8]. Lee and Wu [110] suggested that the slack resource does have a positive effect on the research and development (R&D) activities of the firms. The firms having more discretionary resources invest in R&D that in turn results in innovation hence leading to the improved financial performance.

### **3.6 The agency theory**

As outlined in Jensen & Meckling's [111] concept of the theory of a firm, the agency theory asserts that there is a conflict of interest between managers and shareholders of a firm [112]. The agency perspective related to CSR shows that in the absence of strong control by shareholders, the opportunistic behavior by managers can exploit corporate resources for their own preferences. This behavior can cause an increase in their own utilities at shareholders' cost and good social performance is maintained at the expense of good financial performance [113]. With reference to CSR, Friedman [6] was arguably an early precursor of agency theory. He asserted that CSR represents self-serving behavior of managers (agents) whose pursuit of social and environmental objectives ultimately harms the shareholders by generating lower profits [91].

### **3.7 The resource-based view**

McWilliams and Seigel [114] defined strategic CSR as the operational mechanism which a firm may employ to gain the competitive advantage in the market.

Thus resource-based view (RBV) helps understanding proactive strategies of investment in social and environmental issues [91]. The internally driven CSR can be found in RBV where managers' motivations could be obtained regarding their pursuit in getting a competitive edge over the competitors. The firm resource model of sustained competitive advantage posited by Barney [115] asserts that sustainable competitive advantage (SCA) is achieved by exploiting four indicators namely value, rareness, inimitability and substitutability.
