Mandatory corporate social responsibility disclosure and firm innovation: Evidence from a quasi-natural experiment
Finance Research Letters, 2022, vol. 47, issue PB
In this paper, I focus on whether government regulations on CSR disclosure can encourage firms’ sustainable growth, innovation in particular. Employing the enactment of a regulation that mandates a subset of firms to disclose their corporate social responsibility (CSR) activities in China as a quasi-natural experiment, I find that mandatory CSR disclosure encourages firm innovation. This positive relation is more pronounced for firms that are ex-ante less transparent. My findings indicate that although social responsible oriented mandatory information disclosure may bring about short-term costs, it can be beneficial to firms’ long-term prospects thorough facilitating patenting activities.
Keywords: Stakeholder; Corporate social responsibility; Mandatory CSR disclosure; Firm Innovation; Quasi-natural Experiment (search for similar items in EconPapers)
JEL-codes: G32 G35 G38 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322001210
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