TY - JOUR
T1 - Competing by conducting good deeds
T2 - The peer effect of corporate social responsibility
AU - Liu, Sibo
AU - Wu, Dejun
N1 - Funding information:
The authors are thankful to Chen Lin, Lai Wei, and Wensi Xie for helpful discussions. Dejun Wu acknowledges financial support from the Education Ministry of China (Project no. 14YJA630067).
Publisher copyright:
© 2015 Elsevier Inc.
PY - 2016/2
Y1 - 2016/2
N2 - How do firms respond to their competitors’ corporate social responsibility (CSR) behavior? We exploit a text-based definition for industry peers to show that the CSR behavior of firms is positively affected by the CSR level of their competitors. The relationship is robust after controlling for firm fixed effects, industry trend, and geographical trend. In addition, the CSR level in turn increases firm value, particularly for firms in highly competitive industries. Taken together, the evidence suggests that a firm's CSR policy is shaped by the peer effect, and managers can influence firm value through CSR behavior.
AB - How do firms respond to their competitors’ corporate social responsibility (CSR) behavior? We exploit a text-based definition for industry peers to show that the CSR behavior of firms is positively affected by the CSR level of their competitors. The relationship is robust after controlling for firm fixed effects, industry trend, and geographical trend. In addition, the CSR level in turn increases firm value, particularly for firms in highly competitive industries. Taken together, the evidence suggests that a firm's CSR policy is shaped by the peer effect, and managers can influence firm value through CSR behavior.
UR - https://www.scopus.com/inward/record.uri?eid=2-s2.0-84949675020&doi=10.1016%2fj.frl.2015.10.013&partnerID=40&md5=c1f8ad006b35fa8d54fd7709d78f82f9
U2 - 10.1016/j.frl.2015.10.013
DO - 10.1016/j.frl.2015.10.013
M3 - Journal article
SN - 1544-6123
VL - 16
SP - 47
EP - 54
JO - Finance Research Letters
JF - Finance Research Letters
ER -
