TY - JOUR
T1 - Signaling through corporate accountability reporting
AU - Lys, Thomas
AU - Naughton, James Patrick
AU - Wang, Clare
N1 - Funding Information:
We thank Brad Barber, Ing-Haw Cheng, Michael Jung, Scott Hirst, Robert Jackson, David Maber, Tjomme Rusticus, Dan Taylor, Beverly Walther, seminar participants at Michigan and Northwestern, participants at the UC Davis Sustainability & Finance Symposium, participants at the HBS-JAE Conference on Corporate Accountability Reporting and especially the discussant Chris Armstrong, an anonymous referee, and the editor SP Kothari for their helpful suggestions and comments. Ira Yeung provided excellent research assistance. We are grateful for the funding of this research by The Kellogg School of Management and the Lawrence Revsine Research Fellowship .
Publisher Copyright:
© 2015 The Authors.
PY - 2015/8/1
Y1 - 2015/8/1
N2 - We document that corporate social responsibility ("CSR") expenditures are not a form of corporate charity nor do they improve future financial performance. Rather, firms undertake CSR expenditures in the current period when they anticipate stronger future financial performance. We show that the causality of the positive association between CSR expenditures and future firm performance differs from what is claimed in the vast majority of the literature and that corporate accountability reporting is another channel through which outsiders may infer insiders' private information about firms' future financial prospects.
AB - We document that corporate social responsibility ("CSR") expenditures are not a form of corporate charity nor do they improve future financial performance. Rather, firms undertake CSR expenditures in the current period when they anticipate stronger future financial performance. We show that the causality of the positive association between CSR expenditures and future firm performance differs from what is claimed in the vast majority of the literature and that corporate accountability reporting is another channel through which outsiders may infer insiders' private information about firms' future financial prospects.
KW - Corporate accountability reporting
KW - Corporate social responsibility
KW - Signaling
KW - Voluntary disclosure
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U2 - 10.1016/j.jacceco.2015.03.001
DO - 10.1016/j.jacceco.2015.03.001
M3 - Article
AN - SCOPUS:84926204422
VL - 60
SP - 56
EP - 72
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 1
ER -
