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The Evolution of Public Companies’ Corporate Social Responsibility

Author

Listed:
  • Mengxi Chen

    (School of Business, The College of New Jersey, Ewing, NJ 08628, USA)

  • Xu Niu

    (College of Business, James Madison University, Harrisonburg, VA 22807, USA)

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.

Suggested Citation

  • Mengxi Chen & Xu Niu, 2024. "The Evolution of Public Companies’ Corporate Social Responsibility," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 14(04), pages 1-33, December.
    • Handle: RePEc:wsi:qjfxxx:v:14:y:2024:i:04:n:s2010139224500137
    DOI: 10.1142/S2010139224500137
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    More about this item

    Keywords

    Corporate social responsibility (CSR); initial public offering (IPO); listing age; firm life cycle;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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