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Corporate social responsibility and financial reporting quality: evidence from US firms

Author

Listed:
  • Dmitriy Chulkov
  • Xiaoqiong Wang

Abstract

Purpose - This study aims to examine the relationship between corporate social responsibility (CSR) and measures of financial reporting quality. Design/methodology/approach - The authors explore the link between CSR and several indicators of firms’ financial reporting quality. Estimation with firm and year fixed effects is based on a sample of US publicly traded firms covering the period from 1991 to 2018. Findings - Empirical results demonstrate that firms with higher CSR scores are associated with higher accuracy of financial forecasts, fewer earnings surprises and greater coverage by financial analysts. This positive relationship is more profound for firms that face low agency concerns, firms that have a higher level of customer awareness, firms that have more long-term institutional ownership or firms that do not face financial constraints. Originality/value - The study contributes to the ongoing debate on the value of CSR. The results support the stakeholder value maximization view of CSR and identify the impact of several factors on its relationship with the quality of financial reporting.

Suggested Citation

  • Dmitriy Chulkov & Xiaoqiong Wang, 2023. "Corporate social responsibility and financial reporting quality: evidence from US firms," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 40(3), pages 445-466, January.
    • Handle: RePEc:eme:sefpps:sef-09-2022-0462
    DOI: 10.1108/SEF-09-2022-0462
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    More about this item

    Keywords

    G10; G32; M14; M40; Corporate social responsibility; Financial reporting quality; Reporting accuracy; Financial economics;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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