Identifying the effect of labor CSR programs on satisfaction, dissatisfaction and labor productivity

This paper empirically identifies the effect of labor corporate social responsibility (CSR) programs on firm’s production and inefficiency based on Herzberg’s two-factor theory. We use a stochastic frontier model and a panel of listed Japanese firms from 2009 to 2016. First, we classify labor CSR programs into either motivation factors or hygiene factors. We then check whether motivation factors push the firm’s production frontier and whether hygiene factors reduce firms’ inefficiency. We also check whether motivation factors and hygiene factors are part of a single continuum or constitute two separate continua. The results show that only some motivation factors push the firm’s production frontier while most of the hygiene factors reduce a firm’s inefficiency. However, some motivation factors are found to have a negative effect on the production frontier, and some hygiene factors increase a firm’s inefficiency. In addition, some hygiene factors behave as motivators pushing the firm’s production frontier