Corporate social responsibility and myopic management practice: Is there a link?

Corporate social responsibility and myopic management practice: Is there a link?

A Corporate Social Responsibility (CSR)-myopic firm is one that experiences greater-than-normal operating profits but scores worse in its CSR ‘strength’ or ‘concern’ rankings than is normally expected during the same year. We show that myopic behavior in CSR concerns (strengths) are positively (nega...

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Bibliographic Details
Main Authors: DING, Kuan Yong David, FERREIRA, C., NGO, Vu Minh, NGUYEN, Phuc V., WONGCHOTI, U.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2023
Subjects:
CSR
Corporate myopia
Discretionary investment
Earnings quality
Finance
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/7343
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Institution: Singapore Management University
Language: English
Description
Summary:A Corporate Social Responsibility (CSR)-myopic firm is one that experiences greater-than-normal operating profits but scores worse in its CSR ‘strength’ or ‘concern’ rankings than is normally expected during the same year. We show that myopic behavior in CSR concerns (strengths) are positively (negatively) related to myopia in other conventional discretionary investments such as marketing, R&D, and capital expenditures. We find that large, highly leveraged firms are less likely to be myopic regarding CSR concerns and other discretionary investments; such firms are more likely to engage in myopic behaviors concerning CSR strength. Myopic firms tend to have lower contemporaneous and future risk-adjusted abnormal returns.

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