Legal Heritage and Corporate Social Responsibility

Abstract This paper explores the influence of regional legal heritage on corporate social responsibility (CSR) practices in U.S. firms, finding that firms in areas with civil law ancestry exhibit significantly stronger CSR strengths and fewer concerns than those in common law regions. Stakeholder‐oriented civil traditions appear to push greater investment in community, environmental and employee initiatives, supporting long‐term value through reputation and trust. Results are economically meaningful and robust: they hold across alternative measures, specifications and an instrumental‐variables approach that mitigates confounding influences. The results confirm comparative evidence that stakeholder‐oriented legal traditions foster stronger CSR, now identified within a single‐country setting using county‐level legal heritage. The study advances theory by introducing a social‐identity micro‐foundation through which legal heritage shapes managerial preferences, and by documenting moderators (size, dividends and education) that amplify identity‐consistent CSR. The insights are valuable for policymakers to calibrate regulations that promote socially responsible practices, while managers can align CSR strategy with local legal‐cultural norms to unlock legitimacy and resilience. Overall, the paper highlights the critical role of legal heritage in driving CSR outcomes and its potential to support sustainable business performance.