Corporate Social (Ir)responsibility

Here is a new study on corporate social responsibility that will feed cynicism about CSR in general:

Corporate Social Responsibility for Irresponsibility

by Matthew J. Kotchen and Jon Jungbien Moon

Abstract:

This paper provides an empirical investigation of the hypothesis that

companies engage in corporate social responsibility (CSR) in order to

offset corporate social irresponsibility (CSI). We find general

support for the causal relationship: when companies do more "harm,"

they also do more "good." The empirical analysis is based on an

extensive 15-year panel dataset that covers nearly 3,000 publicly

traded companies. In addition to the overall finding that more CSI

results in more CSR, we find evidence of heterogeneity among

industries, where the effect is stronger in industries where CSI

tends to be the subject of greater public scrutiny. We also

investigate the degree of substitutability between different

categories of CSR and CSI. Within the categories of community

relations, environment, and human rights--arguably among those

dimensions of social responsibility that are most salient--there is a

strong within-category relationship. In contrast, the

within-category relationship for corporate governance is weak, but

CSI related to corporate governance appears to increase CSR in most

other categories. Thus, when CSI concerns arise about corporate

governance, companies seemingly choose to offset with CSR in other

dimensions, rather than reform governance itself.