Corporate Social Responsibility and Earnings Predictability

摘要

The current study examines the association between corporate social responsibility (CSR) and earnings predictability. It draws on theory from economics and management to hypothesize and test how CSR may impact earnings predictability. The hypotheses are tested by examining the association between properties of analyst forecasts and two CSR measures (CSR Strengths and CSR Concerns from KLD STATS data). Results show firms that are more socially responsible, when CSR is measured in terms of CSR Concerns, have less error and less forecast dispersion. When CSR is measured in terms of CSR Strengths, more socially responsible firms have more error and more forecast dispersion.