Abstract

http://ssrn.com/abstract=2143259
 
 

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Signaling Through Corporate Accountability Reporting


Thomas Z. Lys


Northwestern University - Kellogg School of Management

James P. Naughton


Northwestern University - Kellogg School of Management

Clare Wang


Northwestern University - Kellogg School of Management

July 2014


Abstract:     
We document that corporate social responsibility (“CSR”) expenditures are not a form of corporate charity nor do they improve future financial performance. Rather, firms undertake CSR expenditures in the current period when they anticipate stronger future financial performance. We show that the causality of the positive association between CSR expenditures and future firm performance differs from what is claimed in the vast majority of the literature and that corporate accountability reporting is another channel through which outsiders may infer insiders’ private information about firms’ future financial prospects.

Number of Pages in PDF File: 43

Keywords: Corporate Accountability Reporting, Corporate Social Responsibility, Voluntary Disclosure, Signaling

JEL Classification: M41, D82, G14, G30, G32, G34

working papers series


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Date posted: September 7, 2012 ; Last revised: August 1, 2014

Suggested Citation

Lys, Thomas Z. and Naughton, James P. and Wang, Clare, Signaling Through Corporate Accountability Reporting (July 2014). Available at SSRN: http://ssrn.com/abstract=2143259 or http://dx.doi.org/10.2139/ssrn.2143259

Contact Information

Thomas Z. Lys
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Department of Accounting & Information Systems
Evanston, IL 60208
United States
847-491-2673 (Phone)
847-467-1202 (Fax)
James P. Naughton (Contact Author)
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
Clare Wang
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
847 491 2670 (Phone)
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