CSR Performance, Financial Reporting, and Investors’ Perception on Financial Reporting
Open Access
- 15 February 2018
- journal article
- research article
- Published by MDPI AG in Sustainability
- Vol. 10 (2), 522
- https://doi.org/10.3390/su10020522
Abstract
This study examines whether socially responsible firms behave differently from other firms in their financial reporting. Specifically, we question whether firms that are better in their corporate social responsibility (CSR) performance also behave in a responsible manner to maintain their financial reporting quality and whether the market rewards such responsible behaviors. Using data from S&P 500 US companies, we find that socially responsible firms are less likely to manage their earnings. However, we fail to find significant relationships between CSR and investors’ perceptions on earnings, measured by stock returns and earnings response coefficient. We interpret the results as investors not fully reflecting the benefits from CSR performance. Our findings are consistent with the notion that CSR activities are motivated by managers’ ethical incentives to serve the interests of stakeholders.This publication has 45 references indexed in Scilit:
- Going green: Market reaction to CSRwire news releasesJournal of Accounting and Public Policy, 2013
- Does CSR Reduce Firm Risk? Evidence from Controversial Industry SectorsJournal of Business Ethics, 2012
- Is Environmental Performance a Determinant of Bond Pricing? Evidence from the U.S. Pulp and Paper and Chemical Industries*Contemporary Accounting Research, 2011
- Corporate Social Responsibility: An Empirical Investigation of U.S. OrganizationsJournal of Business Ethics, 2008
- The Effects of Person–Organization Ethical Fit on Employee Attraction and Retention: Towards a Testable Explanatory ModelJournal of Business Ethics, 2007
- Earnings management through real activities manipulationJournal of Accounting and Economics, 2006
- Corporate Social Responsibility and Socially Responsible Investing: A Global PerspectiveJournal of Business Ethics, 2006
- The investment opportunity set and corporate financing, dividend, and compensation policiesJournal of Financial Economics, 1992
- Data in Search of a Theory: A Critical Examination of the Relationships Among Social Performance, Social Disclosure, and Economic Performance of U.S. FirmsAcademy of Management Review, 1985
- Data in Search of a Theory: A Critical Examination of the Relationships among Social Performance, Social Disclosure, and Economic Performance of U. S. FirmsAcademy of Management Review, 1985