Corporate Social Responsibility and Financial Information Quality

Abstract

Corporate social responsibility has gained increasing popularity among managers and investors. Many firms commit significant resources and consider CSR as a part of their long-term strategic plan. Whether corporate social responsibility affects corporate financial information quality has been an important question. Using a big sample of corporations in the U.S., I study the relationship between corporate social responsibility (CSR) and corporate financial information quality. I find a significant and positive relationship between CSR and financial information quality. This relationship is robust to potential endogeneity concerns. These findings have important implications for financial disclosure, CSR, and corporate strategy.