The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China

By Yi Chen, Mingyi Hung, Yongxiang Wang. 2017

1,197 citations recorded by the source corpus.

We examine how mandatory disclosure of corporate social responsibility (CSR) impacts firm performance and social externalities. Our analysis exploits China's 2008 mandate requiring firms to disclose CSR activities, using a difference-in-differences design. Although the mandate does not require firms to spend on CSR, we find that mandatory CSR reporting firms experience a decrease in profitability subsequent to the mandate. In addition, the cities most impacted by the disclosure mandate experience a decrease in their industrial wastewater and SO2 emission levels. These findings suggest that mandatory CSR disclosure alters firm behavior and generates positive externalities at the expense of shareholders.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/e7388659cf15d2f2fcaed448a7cc5d34766a1f9f

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In Economics and Econometrics

1. Joerg-Markus Hitz
2. P. Fiechter
3. Alper Darendeli
4. Stefan Reichelstein
5. A. Zaklan
6. J. Ernstberger

In Marketing

1. Joerg-Markus Hitz
2. P. Fiechter
3. Alper Darendeli

In Strategy and Management

1. Joerg-Markus Hitz
2. P. Fiechter
3. Alper Darendeli
4. A. Zaklan
5. J. Ernstberger
6. Christian Leuz

Citations in the corpus

• The Role of Corporate Social Responsibility (CSR) Information in Supply-Chain Contracting: Evidence from the Expansion of CSR Rating Coverage (2021, background): “Second, in the spirit of prior literature on the real effects of mandatory CSR disclosures (e.g., Christensen et al., 2017; Chen et al., 2018), we examine whether”