Do Socially Responsible Managers Forecast Sales More Accurately?

Abstract

We examine whether corporate social responsibility is related to management sales forecast accuracy. More specifically, we question whether firms that present a high social responsibility level commit lower sales forecast errors, as compared to firms that do not meet analogous levels of social responsibility. Differentiating from prior research, we control for the level of managerial ability (MAscore).

We find that socially responsible firms:

(1) commit forecast errors of lower magnitude, and

(2) sales forecast accuracy is positively related to the level of corporate social responsibility.

Our findings are supportive towards the direction of creating robust growth through CSR strategy, since managers appear to predict sales figures more accurately.

Keywords: Corporate Social Responsibility; Management Forecasts; Managerial Ability