Corporate Social Responsibility and Information Flow

Authors

Gary Chen, University of Illinois at Chicago
Bin Wang, Marquette UniversityFollow
Xiaohong Wang, Northeastern Illinois University

Document Type

Article

Publication Date

6-2021

Publisher

Wiley

Source Publication

Accounting & Finance

Source ISSN

0810-5391

Abstract

We find that a firm's greater commitment to corporate social responsibility (CSR) increases firm- specific information incorporated into stock prices. We further show that information searches increase around major disclosure events for firms that are more socially responsible, as observed through requests for newly released annual (10-K) filings on EDGAR and company ticker searches on Google around earnings announcements. Using alternative empirical specifications, we establish a robust and positive relation between CSR and stock price informativeness. Our results are consistent with the ethical and reputational view that a commitment to CSR encourages information acquisition and facilitates information flow into stock prices.

Comments

Accepted version. Accounting and Finance, Vol. 61, No. 2 (June 2021): 2759-2807. DOI. © 2021 Wiley. Used with permission.

Recommended Citation

Chen, Gary; Wang, Bin; and Wang, Xiaohong, "Corporate Social Responsibility and Information Flow" (2021). Finance Faculty Research and Publications. 144.
https://epublications.marquette.edu/fin_fac/144