Does Corporate Social Responsibility Reduce Information Asymmetry? Empirical Evidence from Australia

Posted: 22 Apr 2019

See all articles by Van Ha Nguyen

Van Ha Nguyen

The University of Newcastle, Australia

Frank W. Agbola

University of Newcastle (Australia)

Bobae Choi

University of Newcastle (Australia) - Newcastle Business School

Date Written: September 19, 2018

Abstract

This study examines whether corporate social responsibility (CSR) reduces information asymmetry (IA). Using a firm-level CSR dataset of Australian publicly listed firms from 2004 to 2014, we estimate IA models using a fixed-effects panel estimator. We find that CSR performance is negatively associated with IA. Moreover, this negative relationship is stronger for larger firms and firms with stronger market power. We also find that the negative association between CSR and IA decreases for firms with a high level of equity risk. Our results are robust to alternative measures of CSR and IA, model specifications and endogeneity controls.

Keywords: corporate social responsibility, information asymmetry, product market power

JEL Classification: D82, G34, M14

Suggested Citation

Nguyen, Van and Agbola, Frank W. and Choi, Bobae, Does Corporate Social Responsibility Reduce Information Asymmetry? Empirical Evidence from Australia (September 19, 2018). Australian Journal of Management, Vol 44, Issue 2, 2019. Available at SSRN: https://ssrn.com/abstract=3364306

Van Nguyen (Contact Author)

The University of Newcastle, Australia ( email )

Australia

Frank W. Agbola

University of Newcastle (Australia) ( email )

Economics Discipline, Newcastle Business School
1 University Drive
Callaghan, NSW 2308
Australia
61249212048 (Phone)

Bobae Choi

University of Newcastle (Australia) - Newcastle Business School ( email )

Callaghan
Newcastle
Australia

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