Influence of information on CSR performance of companies on their stakeholders
Publication at the Chair of Accounting and Auditing
The paper "The Role of Corporate Social Responsibility (CSR) Information in Supply-Chain Contracting: Evidence from the Expansion of CSR Rating Coverage", authored by Markus Hitz and his coauthors Alper Darendeli (NTU Singapore), Peter Fiechter (University of Neuchâtel) and Nico Lehmann (Erasmus University Rotterdam), has been accepted for publication in the Journal of Accounting & Economics. The Journal of Accounting & Economics is listed in the Financial Times 50 list and (together with the Journal of Accounting Research) represents one of the two leading (A+) research journals in the field of Accounting. Prof. Dr. Jörg-Markus Hitz heads the Chair of Accounting and Auditing at the Faculty of Business and Economics at the Georg-August-Universität Göttingen.
In this paper, the authors investigate the effect of CSR information on stakeholder decision-making, specifically on supply-chain contracting. Exploiting a CSR information shock, the first time CSR rating coverage of a sample of U.S. suppliers, the authors find a negative effect of the CSR information shock on treated suppliers with comparatively low CSR ratings. On average, these suppliers experience reductions in their number of contracts and corporate customers. Cross-sectional analyses suggest that this negative effect is due to two underlying mechanisms: On the one hand, benchmarking of suppliers’ CSR by corporate customers and on the other hand CSR-related public pressure on customer-supplier contracting.
Collectively, these findings provide evidence on the causal effect of CSR information on stakeholders’ decision-making. The study has potential implications e.g. for regulators’ use of CSR transparency mandates as a public policy tool.
The paper is available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3806236