Oil shocks and corporate social responsibility

This study examines the effects of oil demand and supply shocks on the corporate social responsibility (CSR) behavior of US listed companies. We find robust evidence that oil demand shocks have significant positive influences on CSR behavior, whereas oil supply shocks have significant negative impacts on firms' CSR activities. When we decompose CSR behavior into strengths and concerns, we observe that the positive influence from oil demand shocks is driven primarily by significant reductions in areas of concern, whereas the negative influence of oil supply shocks is driven by both a reduction in areas of strength and a simultaneous increase in areas of concern. Further analysis reveals that oil demand shocks propel improvements in community, diversity and governance but have a negative impact on environmental areas. In contrast, oil supply shocks have negative influences on all aspects of CSR measures. These results persist across both oil and non-oil companies and show the substantial influence of oil shocks. Overall, our findings shed new light on the impact of segregated oil shocks on CSR behavior.