Does corporate social responsibility reduce information asymmetry? Empirical evidence from Australia

Nguyen Van Ha, Frank Agbola and Bobae Choi

Australian Journal of Management, 2019, vol. 44, issue 2, 188-211

Abstract: This study examines whether corporate social responsibility (CSR) reduces information asymmetry (IA). Using a firm-level CSR dataset of Australian publicly listed firms from 2004 to 2014, we estimate IA models using a fixed-effects panel estimator. We find that CSR performance is negatively associated with IA. Moreover, this negative relationship is stronger for larger firms and firms with stronger market power. We also find that the negative association between CSR and IA decreases for firms with a high level of equity risk. Our results are robust to alternative measures of CSR and IA, model specifications and endogeneity controls. JEL Classification: D82, G34, M14

Keywords: Corporate social responsibility; information asymmetry; product market power (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:44:y:2019:i:2:p:188-211

DOI: 10.1177/0312896218797163

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