Effects of CSR Disclosure on Firm Performance – Evidence From Quasi-experiments in Taiwan (70796)

Session Information: Sustainability
Session Chair: Marie Waxin

Saturday, 27 May 2023 15:35
Session: Session 4
Room: Room 707
Presentation Type:Oral Presentation

All presentation times are UTC + 9 (Asia/Tokyo)

The Taiwan government started to require some of the publicly listed firms to release their CSR report since 2014. We utilize the panel data of publicly listed firms and various identification strategies to estimate the causal effect of mandatory CSR disclosure and voluntary CSR disclosure on firm performance. We find that the mandatory CSR disclosure significantly reduced a firms' incidents associated with corporate social responsibility but not the fines or frequency for law violation. A social responsibility incident could be just a controversial firm activity and does not imply any legal violation and contingent penalties. It could lie in the grey area which had been neglected by the firm but became more a concern for the society. In contrast, firms have strong incentives for legal compliance and usually have established codes to avoid violating laws and contingent penalties. A mandatory CSR report would not affect a firm's legal compliance since the firm has already its procedures to mitigate the hazards of law violations. However, a mandatory CSR report, though does not require for any CSR activities, could raise a firm's awareness of CSR. Consequently, it is likely that a firm which used to neglect CSR starts to devote resources to CSR and reduce potential CSR incidents. Our evidence thus supports the argument that mandatory CSR disclosure can ameliorate firms' negative externalities by inducing firms to reduce social responsibility incidents.

Shih-Ying Wu, National Tsing Hua University, Taiwan
Chang-Hsien Tsai, National Tsing Hua University, Taiwan
Yi-Kai Wang, National Tsing Hua University, Taiwan

About the Presenter(s)
Professor Shih-Ying Wu is a University Professor/Principal Lecturer at National Tsing Hua University in Taiwan

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Posted by Clive Staples Lewis

Last updated: 2023-02-23 23:45:00