Do Markets Punish or Reward Corporate Social Responsibility Decoupling?
By Isabel‐María García‐Sánchez, Nazim Hussain, S. Khan, Jennifer Martínez‐Ferrero. 2020
225 citations recorded by the source corpus.
This article analyzes the relationship between corporate social responsibility (CSR) decoupling and financial market outcomes. CSR decoupling refers to the gap between CSR disclosure and CSR performance. More specifically, we analyze the effect of CSR decoupling on analysts’ forecast errors, cost of capital, and access to finance. We also examine the moderating effect of forecast errors on relationships between CSR decoupling and cost of capital and access to finance. For a sample of U.S. firms consisting of 7,681 firm-year observations for the period 2006–2015, our empirical evidence supports the idea that a wider gap results in higher analysts’ forecast errors, a greater cost of capital, and reduced access to finance. In addition, our results show that forecast errors enhance the effect of the CSR decoupling on cost of capital and access to financial resources. We also note that external monitoring, in the form of greater analysts’ coverage, reduces CSR decoupling.
Subfields: Accounting, Marketing, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/3db8c1e243426c7f982f9477c5944cab06195d7e
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Citations in the corpus
- Corporate Social Responsibility during COVID-19 Pandemic (2020, background): “Additionally, because some companies may adopt decoupled practices between their CSR actions and the public information they provide in this regard [49], news has been identified in the media.”