Happy to share what I do: effect of financial performance and performance feedback on CSR reporting
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| Year of publication | 2019 |
| Type | Appeared in Conference without Proceedings |
| MU Faculty or unit | |
| Citation | |
| Description | Purpose: The purpose of this paper is to investigate the impact of a corporate financial performance (CFP) on corporate social responsibility (CRS) reporting, regarding both the overall level of disclosure and its changes. Design/methodology/approach: We use panel data models on a sample of the US companies that were part of S&P500 stock market index by June 2018. Data are retrieved from Bloomberg database, and we use ROA as a financial performance measure and ESG disclosure score as a proxy for CSR reporting. Findings: The results show that the overall level of CSR reporting is not affected by ROA. However, its changes are subject to performance feedback and we identify inverted U-shape effect for negative performance feedback. Research/practical implications: We show that CSR reporting may be a subject to different effects of CFP than previous literature shows for CSR activities. Therefore, researchers should distinguish between the two perspectives on CSR. Additionally, our findings may be helpful in understanding the overall CFP CSR relationship. Originality/value: This paper is the first that directly test the effect of performance feedback on CSR reporting and thus significantly contributes to existing literature examining CSR CFP relationship. We show that firms react to performance feedback with changes in their CSR reporting. |
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