“The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China” (2017), by Yi‐Chun Chen et al. Business and Management research paper. Original abstract below, unchanged. No free PDF was found.

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

Yi‐Chun Chen, Mingyi Hung, Yongxiang Wang · November 21, 2017 · Business and Management

Abstract

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.

Source page DOI: 10.1016/j.jacceco.2017.11.009