The Effects of Executives’ Time Horizons on CSR Disclosures

Abstract

Management scholars have long been interested in understanding executives’ time perspectives. We extend this research by examining the strategic implications of executives’ time horizons. Because executives with short-term horizons emphasize explicit short-term value, they may use CSR disclosures as an impression management tactic to efficiently garner resources from stakeholders. We then posit that the positive effect of executives’ short-term horizons on CSR disclosures is weakened when the firm has better internal resource conditions as indicated by firm slack and board political connections. Further, we hypothesize that CSR disclosures have a positive effect on firm performance, but that this effect is attenuated by executives’ short-term horizons. We test and find support for these arguments using a longitudinal sample of 482 listed Chinese firms from 2010 to 2014. This study explicates the cognitive mechanisms underlying how executives’ time perspectives affect specific CSR activities.