Signaling through corporate accountability reporting

By Thomas Z Lys, James P. Naughton, Clare Wang. 2015

841 citations recorded by the source corpus.

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.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/03d52b3ab1de551b8f58a598b5877d3bb18d8bce

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Citations in the corpus

Corporate social responsibility, product market perception, and firm value (2020, neutral): “Lys et al. (2015) find that firms undertake CSR expenditures in the current period when they anticipate stronger future financial performance.”
Informational Content and Assurance of Textual Disclosures: Evidence on Integrated Reporting (2019, neutral): “in Mercer (2004) that the interactions between assurance and disclosure characteristics remain unexplored.”
Corporate social responsibility and capital allocation efficiency (2017, neutral): “Contrary to the vast majority of recent and prior studies, Lys et al. (2015) posit that CSR 355A. Bhandari, D. Javakhadze / Journal of Corporate Finance 43 (2017) 354–377”
The valuation relevance of environmental performance revisited: The moderating role of environmental provisions (2017, background): “related to a firm’s environmental performance either by signaling strong future financial performance (Beaver et al., 1989; Lys et al., 2015; Wahlen, 1994) or by enhancing the”
Corporate Social Responsibility Report Narratives and Analyst Forecast Accuracy (2017, background): “…response, many firms have started to issue standalone CSR reports.1 While providing extensive information about CSR activities to investors (Simnett et al. 2009; Cohen and Simnett 2014; Casey and Grenier 2015), these reports bring significant capital market benefits to the firms (Lys et al. 2015).”
Corporate Social Responsibility, Tax Avoidance, and Earnings Performance (2015, background): “I add to the line of research documenting determinants of tax avoidance, utilizing insights from financial accounting research (Lys et al. 2015) to deepen our understanding of the role of CSR in tax avoidance and help reconcile the seemingly divergent findings of Hoi et al.”