THE ACCOUNTING REVIEW
Vol. 87, No. 3
2012
pp. 797–806
American Accounting Association
DOI: 10.2308/accr-10257
A Broader Perspective on Corporate Social
Responsibility Research in Accounting
Donald V. Moser
Patrick R. Martin
University of Pittsburgh
Keywords: corporate social responsibility; CSR disclosures; nonfinancial disclosures;
CSR experiments; CSR accounting research.
I. INTRODUCTION
M
ost companies try to project an image of corporate social responsibility (CSR), often by
voluntarily supplementing their annual financial reports with separate CSR reports.1
Because such CSR reports represent additional disclosures, accounting researchers have
become increasingly interested in the role that such disclosures play in firm valuation. The
fundamental importance of CSR issues in accounting research is evidenced by the two articles in
this Forum (Dhaliwal et al. 2012; Kim et al. 2012), as well as by other recent CSR articles
published in The Accounting Review (Dhaliwal et al. 2011; Balakrishnan et al. 2011; Simnett et al.
2009) and other outlets.2
Traditionally, scholars have considered two broad perspectives on CSR. Economics, finance,
and accounting researchers (e.g., Friedman 1970; Shank et al. 2005; Dhaliwal et al. 2011), as well
as some writers in the financial press (Karnani 2010), have typically taken the perspective that
companies will, or should, only engage in socially responsible activities when doing so maximizes
shareholder value. However, there is also a long history of an alternative perspective advocated by
We appreciate the helpful comments of Ramji Balakrishnan, Harry Evans, Lynn Hannan, Steve Kachelmeier, Geoff
Sprinkle, Greg Waymire, Michael Williamson, and the authors of the two Forum papers on earlier versions of this
commentary. Although we have benefited significantly from such comments, the views expressed are our own and do not
necessarily represent the views of others who have kindly shared their insights with us.
Editor’s note: Invited by John Harry Evans III.
Submitted: Invited
Accepted: February 2012
Published Online: February 2012
1
2
CSR reporting is generally viewed as voluntary even though a few countries now require certain limited CSR
disclosures. As noted in KPMG’s Global Sustainability Services and United Nations Environment Programme
(2006), ‘‘these requirements remain largely fragmented and in most cases do not fit an integrated strategy to
regulate sustainability reporting.’’ KPMG’s Global Sustainability Services and United Nations Environment
Programme (2006) also notes that even the most comprehensive of the existing mandatory reporting
requirements, France’s Nouvelles Regulations Economiques, results in only partial compliance, with some
companies completely ignoring its provisions.
Of course, there are many other earlier CSR studies published in The Accounting Review and in many other
accounting journals. We do not cite such papers because this commentary is not intended to provide a review of
prior CSR work, but rather to comment on how accounting researchers might consider a broader perspective
when studying CSR issues.
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scholars in other fields (see Carroll [1999] for an historical review; Reinhart et al. 2008; Kolstad
2007; McWilliams and Siegel 2001) and by many writers in the popular business press (Grow et al.
2005; Friedman et al. 2005) that some companies might also make investments that benefit society
even when doing so decreases shareholder value.3
The Harvard Business School (HBS), in collaboration with the Journal of Accounting and
Economics (JAE), recently announced that they will host a conference on ‘‘Corporate
Accountability Reporting’’ in 2013.4 The conference ‘‘call for papers’’ moves toward
acknowledging the two broad perspectives described above when it notes that ‘‘Corporate
accountability reporting is broadly consistent with at least two hypotheses: (1) such reporting
augments shareholders’ demand for information and monitoring; (2) such reporting responds to
non-shareholder constituents’ demands, potentially, but not necessarily, at the shareholders’
expense.’’5 By focusing on the interests of shareholders, the first hypothesis is generally consistent
with the traditional perspective of most accounting researchers. In contrast, the second hypothesis
potentially expands the traditional perspective of many accounting researchers by recognizing that
some firms may engage in CSR activities ‘‘at the shareholders’ expense.’’
The traditional shareholder perspective presumes that managers would not intentionally engage
in any CSR activity at the expense of shareholders. In contrast, if managers engage in CSR
activities to respond to the needs or demands of a broader group of stakeholders, then it is possible
that some CSR activities are undertaken at the expense of shareholders. In turn, the related
disclosures could serve a broader purpose than simply providing value-relevant information to
shareholders. Note that we are not suggesting that all CSR activities that respond to the needs or
demands of a broader group of stakeholders are undertaken at the expense of shareholders, but
rather that it is likely that some are.6
By ‘‘at the expense of shareholders’’ we mean that the costs of the CSR activity to the firm
exceed the benefits to the firm.7 It seems reasonable to expect that expenditures on any specific CSR
activity would eventually reach a point at which the costs exceed the benefits. For example, in order
for investments in green technology to maximize shareholder value, the costs of such investments
must be less than the benefits to the firm that could come in the form of lower fuel costs, enhanced
reputation with customers, greater employee satisfaction and retention, less regulation, etc. Such
potential benefits are limited and, therefore, managers could theoretically spend more on green
technology than the expected benefits. Of course, managers whose only goal is to maximize
shareholder value would not intentionally overspend on green technology. However, managers
whose goals included responding to the needs of society or the demands of environmental groups
might overspend on such technology.
3
4
5
6
7
Some researchers and writers have advocated strong normative positions, insisting that companies should not invest in
CSR activities unless they maximize shareholder value (e.g., Friedman 1970) or, in contrast, that companies should
invest in certain CSR activities even if they decrease shareholder value (see Mackey’s comments in Friedman et al.
[2005]; Handy 2002). We take no position in this normative debate. Instead, we focus only on what we believe are the
important implications of recognizing that many companies’ CSR activities and disclosures are likely to respond to the
demands of both shareholders and a broader set of stakeholders.
See http://www.hbs.edu/units/am/conferences/2013/corporate-accountability-reporting
We use ‘‘disclosure’’ and ‘‘reporting’’ interchangeably to refer to cases in which a firm provides information
about their CSR activities.
A related question is why managers might have preferences for the societal benefits associated with CSR, particularly
if such benefits come at a cost to the manager’s personal wealth. Smith (2008) suggests that such preferences may
arise because of the social nature of the world in which humans function, and that in this social world an individual
must consider others’ welfare in order to pursue individual goals. Alexander (1987) suggests that such preferences
may have evolved because of the long-term benefits that can result from being viewed as altruistic.
Benabou and Tirole (2010, 2) recently acknowledged this perspective, noting, ‘‘A standard definition of CSR is
that it is about sacrificing profits in the social interest. For there to be sacrifice, the firm must go beyond its legal
and contractual obligations, on a voluntary basis.’’
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For unprofitable CSR activities to persist when shareholders prefer to maximize profits, such
activities must be able to withstand the disciplining forces within firms and by capital and labor
markets outside firms. Separation of ownership and management inevitably brings information
asymmetries between owners and managers of firms. Such information asymmetry, in conjunction
with conflicting preferences between owners and managers, gives rise to various forms of agency
costs (Jensen and Meckling 1976). In the case of unprofitable CSR investment, agency costs can
arise when individual managers have preferences for societal benefits of CSR that owners do not
share. As with other agency costs, the cost to the firm of eliciting managers’ knowledge about CSR
costs and benefits, as well as the cost of monitoring managers’ associated CSR activities, precludes
optimal contracts from eliminating all unprofitable CSR investment. Further, as with other agency
costs, disciplining capital or labor market forces may reduce, but are unlikely to eliminate, all such
CSR investment.
To summarize the discussion above, we believe that it is important to understand the extent to
which the demand for CSR activities is driven by non-shareholder constituents and whether the
related disclosures may therefore serve different or broader purposes than other traditional corporate
financial disclosures. In our view, accounting researchers would benefit from being more open to
this alternative perspective because it raises a variety of new and interesting research questions that
are unlikely to be asked if researchers maintain the traditional shareholder perspective. Moreover,
studying such questions will expand our understanding of CSR issues beyond what can be learned
if we maintain the traditional perspective.
A key theme of this commentary is that some of the new questions and potential insights that
arise as a result of taking a broader perspective on CSR are difficult to address using archival data
alone. Consequently, we discuss how controlled experiments offer an effective way to overcome
some of the limitations of available archival data. We believe that adopting a broader perspective
and addressing the associated questions using a combination of archival and experimental research
methods will lead to a better and more complete understanding of CSR activities and related
disclosures. In our view, providing such insights will help accounting researchers move to the
forefront of CSR research.
II. FORUM PAPERS
The two papers included in this Forum (Dhaliwal et al. 2012; Kim et al. 2012) are examples of
CSR research that aligns with the perspective that CSR activities and disclosures are primarily a
response to shareholder demand. Dhaliwal et al. (2012) adopt a shareholder perspective directly by
focusing on whether CSR disclosure provides useful information to investors. Kim et al. (2012) also
adopt a shareholder perspective, but somewhat less directly. Their primary research question is
whether managers who engage in more CSR activities also engage in less earnings management. To
the extent that the quality of reported earnings is relevant for investors’ decisions, Kim et al.’s
(2012) study also reflects a focus on how CSR activities affect shareholders.
Dhaliwal et al. (2012) measure CSR disclosure as the presence of a stand-alone CSR report and
utilize analyst forecasts as a proxy for information used by investors. They show that the issuance
of a stand-alone CSR report is significantly associated with lower analyst forecast errors. They also
provide evidence that this effect is more pronounced in countries with a stronger stakeholder focus
and for firms and countries with more opaque traditional financial disclosures.
Although Dhaliwal et al.’s (2012) main focus is on whether CSR reporting provides investors with
value-relevant information, they nevertheless recognize the potential influence of other stakeholders by
suggesting that the information content in CSR reports may operate through such stakeholders.
Specifically, they suggest that CSR activities can lead to better financial performance by improving the
firm’s reputation with customers in order to increase sales, improving a firm’s reputation with
regulators to receive more favorable treatment, attracting and motivating employees, etc.
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Dhaliwal et al. (2012) interpret their findings as consistent with a positive association between
CSR activities and firm financial performance. However, we note that their findings do not preclude
the possibility that some CSR activities are not profit-maximizing. That is, their results can be
interpreted more broadly as showing that stand-alone CSR reports provide incremental information,
either positive or negative, to the market about a firm’s financial performance. This less restrictive
interpretation of Dhaliwal et al.’s (2012) results is consistent with their interpretation that CSR
reports provide value-relevant information to investors, but does not rely on a positive association
between CSR reports and financial performance.
Moving to the second study in this forum, the primary measure of CSR performance used by
Kim et al. (2012) is based on data from Kinder, Lydenburg, and Domini (KLD), which has been
widely used to measure CSR activity (Chatterji et al. 2009; Margolis et al. 2009). Kim et al. (2012)
test whether this measure of CSR performance is associated with three separate measures of
earnings management: discretionary accruals, real earnings manipulation, and Accounting and
Auditing Enforcement Releases. They assume that engaging in CSR activities at the expense of
shareholders and earnings management are both unethical behaviors and note that if managers were
engaging in both such unethical behaviors, then they would find a positive association between
CSR activities and earnings management. Because they find a negative association between CSR
performance and each of their three measures of earnings management, they interpret their results as
consistent with ethical managers engaging in ethical CSR activities (i.e., activities that do not come
at the expense of shareholders) and less earnings management.8
We agree that the negative association that Kim et al. (2012) document between CSR activities
and earnings management is consistent with ethical managers engaging in both more CSR activities
and less earnings management. However, we note that their results do not preclude the possibility
that ethical managers could still be engaging in CSR activities at the expense of shareholders. In
fact, a reasonable hypothesis is that some ethical managers believe it is important to be good
corporate citizens even when doing so is not in the best interest of shareholders. Therefore, when
such ethical managers consider the societal benefits associated with CSR activities, it is possible
that they will engage in CSR activities for which the financial costs exceed the financial benefits to
the shareholders.
In summary, both studies in this Forum expand our understanding of how CSR disclosures
could be a response to investors’ demand for information, which is a natural perspective for many
accounting researchers. However, as discussed above, neither study precludes the possibility that
some CSR disclosures also respond to the needs of a broader group of stakeholders. We next
discuss the potential implications of adopting a broader perspective on CSR activities and the
limitations of some of the currently available CSR data.
III. IMPLICATIONS FOR CSR RESEARCH
Researchers have long sought to determine whether there is a positive association between
CSR and financial performance.9 Evidence of such a link would help reduce the tension between
8
9
Petrovits (2006) provides evidence that at least a subset of managers who are involved in CSR activities also
engage in earnings management. Specifically, Petrovits (2006) finds that some managers may manage earnings
by making opportunistic funding choices to corporate-sponsored charitable foundations.
In the most recent and comprehensive meta-analysis of 251 studies that examine the association between CSR
and measures of financial performance over the last 40 years, Margolis et al. (2009) conclude that ‘‘the overall
effect is positive but small . . . and the results for the 106 studies for the past decade are even smaller.’’ Of the
251 studies, 59 percent reported a nonsignificant result, 28 percent found a positive result, 2 percent a negative
result, and the remaining 10 percent did not report sample size or significance. Thus, the link between CSR and
financial performance is not clearly established (for earlier evidence see also, Orlitzky et al. 2003; Margolis and
Walsh 2003; McWilliams and Siegel 2000; Griffin and Mahon 1997; Waddock and Graves 1997).
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the two broad perspectives on CSR described earlier.10 That is, if CSR activities improve financial
performance, then it is less likely that such investments decrease shareholder value. However, we
note that even if there were convincing evidence of an overall positive association between CSR
and financial performance, some CSR investments might still decrease shareholder value for two
reasons: (1) managers could still be spending resources on CSR activities that would earn a higher
return if allocated to other investment activities, and (2) the net impact of all CSR activities could be
profitable, but some individual CSR projects could still be unprofitable.
As suggested in the ‘‘call for papers’’ for the HBS/JAE conference, despite a significant amount
of prior research, we do not yet fully understand the extent to which current CSR disclosures are
directed toward investors, other stakeholders, or both. Nor do we fully understand how investors
and other stakeholders react to CSR disclosures. Further, without understanding managers’
incentives for disclosing CSR information, we are unsure whether such disclosures are reliable.11
Given that CSR disclosures are voluntary and mostly unverified by an independent third party, we
might expect managers to put a positive spin on the information they disclose.12 The voluntary and
unverified nature of CSR disclosures raises concerns regarding their reliability and completeness as
measures of investments in CSR.
Most important for our discussion is the fact that current disclosures do not provide direct data
on CSR expenditures or on the profitability of such expenditures.13 Given this, it is difficult to
reliably determine whether CSR activities overall increase or decrease firm profit and even more
difficult to determine whether any specific type of CSR expenditure increases or decreases firm
profit.14 As indicated earlier, it seems reasonable to expect that some specific CSR expenditures
increase firm profit while other expenditures may decrease firm profit. We next discuss how
experiments can complement archival studies by providing insights that are difficult to obtain from
archival studies because of such data limitations.
IV. POTENTIAL INSIGHTS FROM EXPERIMENTS
As is the case for the two studies in this Forum, most previous CSR studies used archival data
to examine the impact of CSR on various measures of firm financial performance or other variables
of interest. A brief description of several recent archival accounting studies follows. Dhaliwal et al.
(2011) find that issuing a stand-alone CSR report is associated with a subsequent reduction in the
cost of equity capital. Simnett et al. (2009) provide evidence that firms that have a greater need for
credibility in their sustainability reports choose to purchase assurance for such reports. Lev et al.
(2010) examine the association between corporate charitable contributions and future revenue and
10
11
12
13
14
See Porter and Kramer (2011) for a thoughtful discussion of why societal needs and corporate profits need not
always be pitted against each other.
Dhaliwal et al. (2011) and Dhaliwal et al. (2012) provide evidence that CSR disclosures have some information
content in that such disclosures are associated with a decreased cost of capital and lower analyst forecast errors.
See Simnett et al. (2009) for a discussion of the limited, and mostly voluntary, independent verification of CSR
reports that currently occurs. Most verification entails compliance with a specific reporting format rather than
assurance regarding the reliability of the reported information (Global Reporting Initiative 2012).
Barnea and Rubin (2010) attempt to address this issue using KLD data as a proxy for CSR expenditure level.
They find: (1) a negative relation between CSR ratings and insider ownership, suggesting that managers pursue
CSR when it is less costly for them personally; and (2) a negative relation between CSR ratings and a firm’s
leverage, suggesting that increasing debt levels inhibit CSR activities not only because of the decrease in cash
available after making interest payments, but also as a result of increased monitoring associated with increased
debt. However, the authors point out that we do not have any actual data on firms’ overall expenditures (Barnea
and Rubin 2010, 71) and that the KLD ratings they use may not be a reliable proxy for such expenditures (Barnea
and Rubin 2010, 84).
Sprinkle and Maines (2010) note that estimating the costs and benefits of CSR activities is difficult even for
managers with access to internal company information. Naturally, it is even more difficult to estimate costs and
benefits when relying only on information that is voluntarily disclosed by firms.
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provide evidence suggesting that such contributions increase future revenue growth via increased
customer satisfaction. Finally, Petrovits (2006) provides evidence consistent with managers using
their discretion over funding of corporate-sponsored charitable foundations to manage earnings.
Such archival studies have helped us better understand some of the possible motivations for CSR
activities and related disclosure choices.
However, in our view, archival CSR studies alone are unlikely to provide us with a full
understanding of the motivations for, and consequences of, CSR activities and managers’ related
disclosure choices. Consequently, we suggest that controlled experiments can be used to address
important CSR issues that are difficult to address effectively in archival studies.15 One of the main
strengths of experiments is that they can overcome some of the key limitations of CSR field data.
For example, in addition to the difficulty of identifying actual CSR expenditures or the profitability
of specific expenditures, Brammer and Millington (2008, 1326) note that CSR performance is a
‘‘multidimensional construct that encompasses a large and varied range of corporate behavior in
relation to its resources, processes, and outputs.’’ Consequently, different aspects of CSR
performance are likely to result from different motivations or to represent responses to different
societal needs or demands, and thus the effects of different types of CSR on financial performance
may vary. This suggests that it is important to isolate individual components of CSR performance
when developing and testing research questions regarding the effects of CSR performance on other
variables of interest. While the available archival data include some information regarding
individual components of CSR, they do not provide data on expenditures by individual category. In
contrast, direct measures of such expenditures can be obtained in controlled experimental settings.
Further, even in cases in which individual components of CSR expenditures or their profitability
can be estimated from available field data, such individual components are potentially confounded
by many other contextual factors that need to be controlled for in any related analyses. Controlling
for such potential confounds is often difficult because good measures of, or proxies for, the
necessary control variables may not exist. For example, field managers might invest in CSR projects
because this boosts their reputation in the community or among special interest groups whose
admiration they value.16 Such behavior could confound other effects that researchers are trying to
identify and finding a good archival proxy for such reputation effects may be difficult. In contrast,
this problem can be addressed directly and effectively in experiments by keeping managers’ actions
anonymous, thereby ruling out reputation effects as an explanation for managers’ CSR investments.
Another important issue that can be examined more effectively in an experiment than with
currently available archival data is the effect of mandatory CSR disclosures. Most available CSR
field data are voluntarily disclosed and therefore such data can provide only limited insight
regarding the consequences of mandatory disclosure of general or specific types of CSR data.17 In
contrast, such issues can be addressed in experiments because experimental settings in which
various disclosures are mandatory can be created and studied even though such settings do not exist
in the field.
15
16
17
Consistent with our view that experiments can offer useful insights into important CSR issues, Benabou and
Tirole (2010) draw heavily on experimental work on prosocial behavior from Psychology and Economics to shed
light on the underlying mix of motivations for CSR.
One of the papers in this forum, Kim et al. (2012), controls for firm reputation that is economically motivated. In
contrast, we have in mind a type of reputation that is not economically motivated, but rather is motivated by a
manager’s desire to bolster his or her own personal image for being socially responsible.
In a recent working paper, Ioannou and Serafeim (2011) attempt to address the issue of mandatory CSR
reporting. However, as described in footnote 1, current mandatory CSR reporting requirements are quite limited
and do not appear to be strictly enforced. Because of this, any conclusions that are reached under the very limited
mandatory CSR requirements that exist may be quite different from those reached under more complete
mandatory CSR reporting requirements.
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V. EXAMPLES OF CSR EXPERIMENTS
Balakrishnan et al. (2011) provide a recent example of how an experiment might complement
archival CSR research. They examine how employers’ charitable giving affects employee behavior
and find that employees transfer more resources to employers as the level of employer charitable
giving increases. A limitation of existing archival measures of CSR activity is that they are only
proxies for the actual underlying CSR activity level. Balakrishnan et al. (2011) overcome this
problem by directly measuring the level of charitable giving in their experiment. Likewise,
Balakrishnan et al. (2011) also overcome the difficulty of measuring employees’ reactions to
employers’ charitable giving by having employees perform a task that provides a direct measure of
their reaction. Finally, Balakrishnan et al. (2011) can rule out external reputation effects as an
explanation for why their employer participants made charitable contributions because they made
such contributions anonymously.
Interestingly, while Balakrishnan et al.’s (2011) study can be viewed as taking a broader
perspective on the motivations for CSR (i.e., motivating employees may be a driver for the
employer’s CSR activity), the study nevertheless primarily adopts a shareholder perspective. That
is, the study focuses on how employer charitable giving may be a tool for motivating employee
effort, suggesting that one reason firms engage in CSR is the economic gains to shareholders that
come from a positive employee response. However, we note that some of Balakrishnan et al.’s
(2011) results suggest that employers gave to charity even when they would have been better off
not doing so. Specifically, in their ‘‘reward’’ condition, the average payoff for the 50 percent of
employers who chose a donation percentage in excess of 20 percent was lower than if they had
chosen a donation percentage of zero.
To provide an example of an experiment that more directly tests whether some managers
consider the benefits of CSR to society in addition to their own and other current shareholders’
interests, we next describe one of our own recent experiments. In Martin and Moser (2012), we
examine green investing in an experimental market setting in which the company manager and the
other current shareholder as well as potential investors know for certain that the green investment is
always unprofitable for the company. We find that manager participants often make unprofitable
green investments even though doing so decreases their own and other current shareholder
participants’ payoffs. Moreover, most managers who make unprofitable green investments disclose
to potential investors that they have done so. Our results suggest that managers provide such
disclosures because the cost of making a green investment that is borne by the managers and the
other current shareholders is lower when the managers disclose their green investment than when
they do not. In addition, many managers who disclose their unprofitable green investments focus
their disclosures on the societal benefits of the investment rather than on the net cost to the
company. Our results provide some evidence that managers slant their disclosures in this way
because the cost of the green investment borne by the managers and the other current shareholders
is lower when the disclosures focus on the societal benefits rather than on the cost to the company.
However, it is important to note that in our experiment, both managers and current shareholders
always bear a financial cost when the managers make an unprofitable green investment. That is,
potential investors’ bids never fully offset the cost of the green investment borne by the managers
and other current shareholders.18
Using an experiment allowed us to design a setting in which all green investments were
unprofitable, overcoming the difficulty of identifying such a setting in the field. In addition, we
18
This finding is consistent with the prior results of Martin (2009) and Elfenbein and McManus (2010), who found
that investors (buyers) were willing to bear part, but not all, of the cost of a charitable contribution made by a
manager (seller). In theory, investors (buyers) could fully offset the costs borne by managers (sellers), but that
did not happen in these experiments.
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designed a setting without many of the confounding effects that could otherwise affect managers’
CSR investment decisions and investors’ reactions in actual corporate settings. For example, in
actual CSR settings, potential future and uncertain benefits of current CSR investments, such as
positive customer or employee reactions, could be used to justify currently unprofitable CSR
investments. By precluding such future benefits in our experimental setting, we were able to rule
out such alternative explanations for managers’ investment decisions and investors’ reaction.
Similarly, we could rule out external reputation effects as an explanation for why managers made
unprofitable CSR investments because our managers made their investment decisions
anonymously.
Of course, experiments also have limitations, the most important of which is concern regarding
the degree to which experimental results generalize to the field. Because the participants in
experiments are typically not actual high-level managers, one question is the degree to which the
behavior of participants acting in the role of high-level managers can be generalized to the field.
Likewise, because the financial stakes in experiments are not as high as real CSR expenditures,
another question is the degree to which behavior observed with lower financial stakes generalizes to
environments with higher financial stakes (see Levitt and List [2007], Falk and Heckman [2009],
and Camerer [2011] for thoughtful discussions of related external validity issues).
Despite the concerns discussed above, given that certain types of archival CSR data are not
available and given concerns regarding the quality and reliability of some of the data that are
available, we believe that experiments can complement archival studies by helping to fill in some of
the gaps in knowledge that are difficult to address with archival data.19 Because CSR activities and
related disclosures are such important issues for accounting researchers, our view is that we should
use all available research methods to try to better understand why such activities and disclosures
have become so prevalent and their consequences for investors and society as a whole.
VI. CONCLUSION
In this commentary we suggest that CSR research in accounting could benefit significantly if
accounting researchers were more open to (1) the possibility that CSR activities and related
disclosures are driven by both shareholders and non-shareholder constituents, and (2) the use of
experiments to answer important CSR questions that are difficult to answer with currently available
archival data. We believe that adopting these suggestions will help accounting researchers obtain a
more complete understanding of the motivations for corporate investments in CSR and the
increasing prevalence of related disclosures.
Our two suggestions are closely related. Viewing CSR more broadly as being motivated by
both shareholders and a broader group of stakeholders raises new and important questions that are
unlikely to be studied by accounting researchers who maintain the traditional perspective that firms
only engage in CSR activities that maximize shareholder value. As discussed in this commentary,
one example is that if CSR activities actually respond to the needs or demands of a broader set of
stakeholders, it is more likely that some CSR investments are made at the expense of shareholders.
Data limitations make it very difficult to address this and related issues in archival studies. In
contrast, such issues can be addressed directly and effectively in experiments. Consequently, we
believe that CSR research is an area in which integrating the findings from archival and
experimental studies can be especially fruitful. The combination of findings from such studies is
likely to provide a more complete understanding of the drivers and consequences of CSR activities
and related disclosures. Providing such insights will help accounting researchers become more
19
Other recent examples of CSR experiments are Pflugrath et al. (2011), Guiral (2012), Brown-Liburd et al. (2012)
and Elliott et al. (2011).
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prominent players in CSR research. Our hope is that the current growing interest in CSR issues, as
reflected in the two papers included in this Forum, represents a renewed effort to substantially
advance CSR research in accounting.
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