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Crime, Punishment and the Halo Effect of Corporate Social Responsibility

Listed author(s):
  • Harrison Hong
  • Inessa Liskovich

Three reasons are often cited for the value of corporate social responsibility: product quality signalling, delegated giving, and the halo effect. Previous tests cannot separate these channels because they focus on consumers, who value all three. We focus on prosecutors, who are only susceptible to the halo effect. Using Foreign Corrupt Practices Act enforcements, we find that social responsibility is associated with 2 million dollars less in fines, though it is uncorrelated with bribe characteristics and cooperation, which should entirely determine sanctions following Becker (1974). We show that this bias is likely a halo effect and not prosecutorial conflict of interest.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 21215.

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Date of creation: May 2015
Handle: RePEc:nbr:nberwo:21215
Note: CF LE
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  1. Arlen, Jennifer, 1994. "The Potentially Perverse Effects of Corporate Criminal Liability," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 832-867, June.
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  13. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
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  17. Di Giuli, Alberta & Kostovetsky, Leonard, 2014. "Are red or blue companies more likely to go green? Politics and corporate social responsibility," Journal of Financial Economics, Elsevier, vol. 111(1), pages 158-180.
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