Local peer effects of corporate social responsibility

Chengcheng Li and Xiaoqiong Wang

Journal of Corporate Finance, 2022, vol. 73, issue C

Abstract: This paper investigates the local peer effects of corporate social responsibility (CSR). We find that a firm's CSR engagement comoves with that of other firms headquartered nearby. The results are robust when considering the nonlocal dominant industry CSR portfolio and different cross-region sensitivities to macro shocks. Moreover, the CSR of firms that change their headquarters location experiences an increase (decrease) in comovement with the CSR of firms in the new (old) location. We further explore several channels through which the local CSR comovement is motivated. We show that local CSR comovement is mainly driven by a firm's incentives to access financing. Besides, we find weak evidence that firms comove in CSR in order to set a positive image to the public and our findings do not support the agency channel of the local peer effects of CSR.

Keywords: Corporate social responsibility; Peer effects; Firm location (search for similar items in EconPapers)
JEL-codes: G10 G12 G23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:73:y:2022:i:c:s092911992200030x

DOI: 10.1016/j.jcorpfin.2022.102187

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