Corporate Social Responsibility Disclosures and Investor Judgments in Difficult Times: The Role of Ethical Culture and Assurance
| Autor: | Andrew C. Stuart, Jean C. Bedard, Cynthia E. Clark |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
business.industry media_common.quotation_subject 05 social sciences chemical and pharmacologic phenomena Accounting 06 humanities and the arts Ethical culture 0603 philosophy ethics and religion Investment (macroeconomics) General Business Management and Accounting Arts and Humanities (miscellaneous) Perception 0502 economics and business Corporate social responsibility Cash flow 060301 applied ethics Business and International Management Decision process Business ethics business Law 050203 business & management media_common Quality of Life Research |
| Zdroj: | Journal of Business Ethics. 171:565-582 |
| ISSN: | 1573-0697 0167-4544 |
| DOI: | 10.1007/s10551-020-04454-z |
| Popis: | We conduct an experiment with 459 nonprofessional investors to examine whether they evaluate companies differently based on management’s stated purpose for undertaking corporate social responsibility (CSR) activities in the presence versus absence of a company-specific negative event. Specifically, we vary whether or not management intends to achieve financial returns from CSR activities in addition to promoting social good. We address investors’ decision processes by investigating whether their judgments are mediated by perceptions of future cash flows and/or the underlying ethical culture of the company. Results show that absent a negative event, investment judgments are stronger when CSR activities are intended to achieve financial returns, through expectations of higher future cash flows. However, when a negative event occurs, we find a moderating effect of independent assurance of CSR disclosures. When disclosures are not assured, investors prefer CSR undertaken only for societal benefit, mediated by perceptions of a stronger ethical culture. However, when disclosures are assured, ethical culture is viewed similarly regardless of management’s intention to achieve financial returns from CSR activities. This suggests that management’s willingness to obtain independent assurance on disclosures is viewed as a positive ethical signal. Thus, assurance complements disclosure of CSR activities by contributing to protection against the impact of negative events. |
| Databáze: | OpenAIRE |
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