Campus Units

Accounting

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

10-7-2019

Journal or Book Title

European Accounting Review

Volume

28

Issue

6

DOI

10.1080/09638180.2019.1670223

Abstract

In this paper, we offer evidence that disclosure of corporate social responsibility (CSR) in the 10-K provides information about firms’ competitive advantages. We create a textual measure of CSR disclosure that aggregates CSR keywords found in 10-Ks. We measure firms’ competitive advantages by using levels of and persistence of industry-adjusted gross margin; selling, general, and administrative (SG&A) margin; and operating margin. We first show that 10-K CSR disclosure intensity is associated with lower levels of gross margin but higher SG&A margin. We then observe that firms with more CSR keywords in their 10-Ks maintain more persistent above-industry-median gross and operating margins. Upon sorting our full set of 10-K CSR keywords into three subcategories (philanthropy, business practice, and product), we find that the intensities of disclosure in these CSR subcategories have associations with varying competitive advantages.

Comments

This accepted article is published as Cannon, J. N., Z. Ling, Q. Wang, and O. V. Watanabe. 2019. 10-K Disclosure of Corporate Social Responsibility and Firms’ Competitive Advantages. European Accounting Review 28(6):000–000. Doi: 10.1080/09638180.2019.1670223. Posted with permission.

Copyright Owner

Taylor & Francis Online

Language

en

File Format

application/pdf

Available for download on Wednesday, April 07, 2021

Published Version

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