Corporate social responsibility and myopic management practice: Is there a link?
Publication Type
Journal Article
Publication Date
10-2023
Abstract
A Corporate Social Responsibility (CSR)-myopic firm is one that experiences greater-than-normal operating profits but scores worse in its CSR ‘strength’ or ‘concern’ rankings than is normally expected during the same year. We show that myopic behavior in CSR concerns (strengths) are positively (negatively) related to myopia in other conventional discretionary investments such as marketing, R&D, and capital expenditures. We find that large, highly leveraged firms are less likely to be myopic regarding CSR concerns and other discretionary investments; such firms are more likely to engage in myopic behaviors concerning CSR strength. Myopic firms tend to have lower contemporaneous and future risk-adjusted abnormal returns.
Keywords
CSR, Corporate myopia, Discretionary investment, Earnings quality
Discipline
Finance
Research Areas
Finance
Publication
Review of Quantitative Finance and Accounting
ISSN
0924-865X
Identifier
https://doi.org/10.1007/s11156-023-01212-w
Publisher
Springer
Citation
DING, Kuan Yong David; FERREIRA, C.; NGO, Vu Minh; NGUYEN, Phuc V.; and WONGCHOTI, U..
Corporate social responsibility and myopic management practice: Is there a link?. (2023). Review of Quantitative Finance and Accounting.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7343