Publication Type
Journal Article
Version
acceptedVersion
Publication Date
12-2019
Abstract
We investigate how firms react to their product-market peers' commitment to and adoption of corporate social responsibility (CSR) using a regression discontinuity design approach. Relying on the passage or failure of CSR proposals by a narrow margin of votes during shareholder meetings, we find the passage of a close-call CSR proposal and its implementation are followed by the adoption of similar CSR practices by peer firms. In addition, peers that have greater difficulty in catching up with the voting firm in CSR experience significantly lower stock returns around the passage, consistent with the notion that the spillover effect of the adoption of CSR is a strategic response to competitive threat. Using alternative definitions of peers and examining underlying mechanisms, we further rule out alternative explanations, such as that based on propagation by financial intermediaries.
Keywords
corporate social responsibility, peer effects, shareholder proposal, regression discontinuity
Discipline
Business Law, Public Responsibility, and Ethics | Corporate Finance
Research Areas
Finance
Publication
Management Science
Volume
65
Issue
12
First Page
5487
Last Page
5503
ISSN
0025-1909
Identifier
10.1287/mnsc.2018.3100
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Citation
CAO, Jie; LIANG, Hao; and ZHAN, Xintong.
Peer effects of corporate social responsibility. (2019). Management Science. 65, (12), 5487-5503.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6584
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/mnsc.2018.3100