Signaling through corporate accountability reporting

Thomas Lys, James P. Naughton and Clare Wang

Journal of Accounting and Economics, 2015, vol. 60, issue 1, 56-72

Abstract: 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.

Keywords: Corporate accountability reporting; Corporate social responsibility; Voluntary disclosure; Signaling (search for similar items in EconPapers)
JEL-codes: D82 G14 G30 G32 G34 M41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (230)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:60:y:2015:i:1:p:56-72

DOI: 10.1016/j.jacceco.2015.03.001

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Journal of Accounting and Economics is currently edited by J. L. Zimmerman, S. P. Kothari, T. Z. Lys and R. L. Watts

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