When Corporate Social Responsibility Backfires: Theory and Evidence from a Natural Field Experiment

32 Pages Posted: 3 Jan 2018

See all articles by John A. List

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Fatemeh Momeni

University of Chicago

Date Written: December 2017

Abstract

Corporate Social Responsibility (CSR) has become a cornerstone of modern business practice, developing from a “why” in the 1960s to a “must” today. Early empirical evidence on both the demand and supply sides has largely confirmed CSR's efficacy. This paper combines theory with a large-scale natural field experiment to connect CSR to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 3000 workers, we find that our usage of CSR increases employee misbehavior - 20% more employees act detrimentally toward our firm by shirking on their primary job duty when we introduce CSR. Complementary treatments suggest that “moral licensing” is at work, in that the “doing good” nature of CSR induces workers to misbehave on another dimension that hurts the firm. In this way, our data highlight a potential dark cloud of CSR, and serve to forewarn that such business practices should not be blindly applied.

Suggested Citation

List, John A. and Momeni, Fatemeh, When Corporate Social Responsibility Backfires: Theory and Evidence from a Natural Field Experiment (December 2017). NBER Working Paper No. w24169. Available at SSRN: https://ssrn.com/abstract=3095130

John A. List (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Fatemeh Momeni

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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