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Corporate Social Responsibility: Three Experimental Studies

Martin, Patrick (2014) Corporate Social Responsibility: Three Experimental Studies. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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My dissertation consists of three experimental studies that examine the impact of the societal benefits associated with corporate social responsibility (CSR) activities on managers’ and investors’ behavior. My first study finds that owner-managers willingly contribute a portion of their firm’s earnings to a green cause, even though this reduces their payoff from selling the firm’s stock. Although investors reduce their bids when the owner-manager contributes to a green cause, they do not do so by the full amount of the contribution. These results provide evidence that both owner-managers and investors value the societal benefits associated with CSR.

My second study (a joint project with Don Moser) extends the first study by changing the ownership structure of the firm from 100% manager-owned to partial management ownership and giving managers disclosure options regarding their CSR investment decisions. This study finds that managers often make green investments even when this reduces shareholder value and often disclose their investments and focus their disclosures on the societal benefits rather than on the cost to the firm. Disclosure lowers the cost of the investment to managers and other current shareholders because potential investors’ standardized bids for the firm are higher when managers disclose their investments than when they do not, and this result is stronger when disclosures focus on the societal benefits.

My third study examines how honesty preferences and the ability to consume slack influence managers’ reporting in a CSR decision setting. In my baseline setting, in which managers do not have the ability to consume slack and honesty preferences play no role, I find that managers act to implement less profitable CSR projects even though this reduces their personal payoff and firm profit. However, in a setting in which managers must misreport to implement a less profitable CSR project, the frequency of such projects decreases, suggesting that managers’ honesty preferences can reduce the frequency of less profitable CSR projects. Finally, in a setting in which lower-level managers can also build slack into their reports, their misreporting in favor of the less profitable CSR project increases, offsetting the deterrent effect of honesty preferences on such misreporting.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
Martin, Patrickprmartin@katz.pitt.eduPRM26
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairMoser, Donalddmoser@katz.pitt.eduMOSER
Committee MemberEvans, Harryjhe@katz.pitt.eduJHE
Committee MemberHoffman, Vickyvickyh@katz.pitt.eduHEIMAN
Committee MemberBirnberg, Jakebirnberg@katz.pitt.eduBIRNBERG
Committee MemberHannan,
Date: 10 February 2014
Date Type: Publication
Defense Date: 13 September 2013
Approval Date: 10 February 2014
Submission Date: 15 November 2013
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Number of Pages: 148
Institution: University of Pittsburgh
Schools and Programs: College of Business Administration > Accounting
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: corporate social responsibility, CSR investment, CSR disclosure, socially responsible investing, green investing, managerial reporting
Date Deposited: 10 Feb 2014 15:02
Last Modified: 19 Dec 2016 14:41


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