Toward an Understanding of Corporate Social Responsibility: Theory and Field Experimental Evidence

74 Pages Posted: 9 Sep 2019

See all articles by Daniel Hedblom

Daniel Hedblom

University of Chicago

Brent Hickman

Washington University in St. Louis - John M. Olin Business School

John A. List

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

Date Written: September 2019

Abstract

We develop theory and a tightly-linked field experiment to explore the supply side implications of corporate social responsibility (CSR). Our natural field experiment, in which we created our own firm and hired actual workers, generates a rich data set on worker behavior and responses to both pecuniary and CSR incentives. Making use of a novel identification framework, we use these data to estimate a structural principal-agent model. This approach permits us to compare and contrast treatment and selection effects of both CSR and financial incentives. Using data from more than 1100 job seekers, we find strong evidence that when a firm advertises work as socially-oriented, it attracts employees who are more productive, produce higher quality work, and have more highly valued leisure time. In terms of enhancing the labor pool, for example, CSR increases the number of applicants by 25 percent, an impact comparable to the effect of a 36 percent increase in wages. We also find an economically important complementarity between CSR and wage offers, highlighting the import of using both to hire and motivate workers. Beyond lending insights into the supply side of CSR, our research design serves as a framework for causal inference on other forms of non-pecuniary incentives and amenities in the workplace, or any other domain more generally.

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Suggested Citation

Hedblom, Daniel and Hickman, Brent and List, John A., Toward an Understanding of Corporate Social Responsibility: Theory and Field Experimental Evidence (September 2019). NBER Working Paper No. w26222. Available at SSRN: https://ssrn.com/abstract=3450248

Daniel Hedblom (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Brent Hickman

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

John A. List

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

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