The Evolution of Public Companies’ Corporate Social Responsibility
Year: 2024
Type: article
Abstract: We examine the evolutionary path of companies’ corporate social responsibility (CSR) since their debuts as public companies. We find that firms’ average CSR score is rising over the time they are listed in the public capital market. The phenomenon is likely driven by the number of years the firms have been in the public market. We further find supporting evidence that this pattern of rising CSR since the public listing is more pronounced when the firm is more profitable, holds more cash, has a higher payout ratio, or has more free cash flows. Overall, our findings support the hypothesis that improving CSR performance may not be the priority of most firms new to the public market, but the “public camera effect” is an effective mechanism to assure the growth of CSR assuming the firms remain in the public market.
Source: Quarterly Journal of Finance
Authors: Mengxi Chen, Xu Niu
Institutions: The College of New Jersey, James Madison University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4404852334