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When Corporate Social Responsibility Backfires: Theory and Evidence from a Natural Field Experiment

John List () and Fatemeh Momeni

No 24169, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Corporate Social Responsibility (CSR) has become a cornerstone of modern business practice, developing from a “why” in the 1960s to a “must” today. Early empirical evidence on both the demand and supply sides has largely confirmed CSR's efficacy. This paper combines theory with a large-scale natural field experiment to connect CSR to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 3000 workers, we find that our usage of CSR increases employee misbehavior - 20% more employees act detrimentally toward our firm by shirking on their primary job duty when we introduce CSR. Complementary treatments suggest that “moral licensing” is at work, in that the “doing good” nature of CSR induces workers to misbehave on another dimension that hurts the firm. In this way, our data highlight a potential dark cloud of CSR, and serve to forewarn that such business practices should not be blindly applied.

JEL-codes: C93 D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
Date: 2017-12
Note: EEE LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

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