Abstract
We examine the effect of CSR information on stakeholder decision-making, specifically on supply-chain contracting. To obtain plausibly exogenous variation in CSR information, we exploit the 2017 expansion of CSR rating coverage from Russell 1000 to Russell 2000 firms (hereafter, “treated firms”) by Thomson Reuters Asset4. Using a difference-in-differences design with the previously covered Russell 1000 supplier firms as the control group, we find a negative effect of the CSR information shock for treated suppliers with comparatively low CSR ratings. On average, these suppliers experience reductions in their number of contracts and corporate customers. In cross-sectional analyses, we document variation in our treatment effects consistent with two underlying mechanisms: (i) benchmarking of suppliers' CSR by corporate customers and (ii) CSR-related public pressure on customer-supplier contracting. Collectively, our findings provide novel evidence on the causal effect of CSR information on stakeholder decision-making.
| Original language | English |
|---|---|
| Article number | 101525 |
| Journal | Journal of Accounting and Economics |
| Volume | 74 |
| Issue number | 2-3 |
| DOIs | |
| Publication status | Published - 1 Nov 2022 |
Bibliographical note
Funding Information:For helpful comments and suggestions, we thank Wayne Guay (editor), an anonymous referee, Hans Christensen (JAE conference discussant), and Thomas Bourveau, Matthias Breuer, Ulf Brüggemann, Anna Costello, Christine Cuny, Richard Frankel, Henry Friedman, Joachim Gassen, Stephen Glaeser, Paul Guest, Zoltan Novotny-Farkas, Mark Lang, Rebecca Lester, David Samuel, Christoph Sextroh, Katharina Weiss, workshop participants at King's College London, Humboldt University Berlin, EASYS-Online workshop, TRR 266 Mini Conference “Accounting for Transparency: Real Effects of Accounting Standards,” Vienna University of Economics and Business, and University of Neuchatel as well as conference participants at the 2021 Journal of Accounting and Economics Conference. We also would like to thank Aneesh Raghunandan for sharing his parent-subsidiary link file for the Violation Tracker dataset. Darendeli acknowledges financial support from NTU's Start-Up Grant.
Funding Information:
For helpful comments and suggestions, we thank Wayne Guay (editor), an anonymous referee, Hans Christensen (JAE conference discussant), and Thomas Bourveau, Matthias Breuer, Ulf Brüggemann, Anna Costello, Christine Cuny, Richard Frankel, Henry Friedman, Joachim Gassen, Stephen Glaeser, Paul Guest, Zoltan Novotny-Farkas, Mark Lang, Rebecca Lester, David Samuel, Christoph Sextroh, Katharina Weiss, workshop participants at King's College London, Humboldt University Berlin, EASYS-Online workshop, TRR 266 Mini Conference “Accounting for Transparency: Real Effects of Accounting Standards,” Vienna University of Economics and Business, and University of Neuchatel as well as conference participants at the 2021 Journal of Accounting and Economics Conference. We also would like to thank Aneesh Raghunandan for sharing his parent-subsidiary link file for the Violation Tracker dataset. Darendeli acknowledges financial support from NTU's Start-Up Grant.
Publisher Copyright:
© 2022 The Authors
