Past as the present, present as the future: the time dynamics of CSR

In light of prevalent greenwashing and window dressing of corporate social responsibility (CSR), stakeholders tend to rely on firms’ past CSR to predict their future CSR. However, extant literature only focuses on CSR at a point in time, rendering the understanding of CSR signals incomplete and misleading. In contrast to the existing literature that adopts a clock view of time (time measured as units of resources), this conceptual article employs a process view of time whereby CSR is seen with a dynamic perspective from which we can develop a more comprehensive understanding of CSR. Drawing on signaling theory, we theorize the time dynamic of CSR connecting the past, the present, and the future, and we develop a range of propositions predicting firms’ CSR. This conceptual article extends signaling theory by complementing mechanisms that generate or strengthen a separating equilibrium. We also contribute to an embryonic stream on “dynamic CSR” literature by advancing the understanding of the time dynamic of CSR.