This paper examines whether US regulation related to corporate social responsibility (CSR) improves firms’ CSR performance. This inquiry is motivated by increasing stakeholder interest in firms’ CSR activities and reporting, as well as questions of increasing regulatory burden over time and government failure to adequately address societal challenges. First, I develop a measure of firms’ CSR regulatory exposure by extracting federal agencies’ regulatory analysis, and applying a machine-learning model for industry classification. Second, I confirm theoretical expectations that more stringent CSR-related rules are associated with higher firm CSR performance in the regulated areas, but with lower CSR performance in the unregulated areas. The result suggests a likely trade-off in firms’ responses to CSR regulation. Cross-sectional tests show that financial constraint (regulatory uncertainty) elevates (reduces) such tradeoffs. Using narrow passage of congressional bills as an exogenous shock to firms’ CSR regulatory exposure, I also provide causal evidence on such tradeoffs.
| Identifer | oai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/44437 |
| Date | 16 May 2022 |
| Creators | Guo, Zhe |
| Contributors | Riedl, Edward J. |
| Source Sets | Boston University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
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