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Real Effects of a Widespread CSR Reporting Mandate: Evidence from the European Union’s CSR Directive
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ABSTRACT We investigate real effects of a widespread corporate social responsibility (CSR) reporting mandate. In 2014, the European Union (EU) passed Directive 2014/95 (hereafter, “CSR Directive”), mandating large listed EU firms to prepare annual nonfinancial reports beginning from fiscal year 2017 onward. We document that firms within the scope of the directive respond by increasing their CSR activities and that they start doing so before the entry‐into‐force of the directive. These real effects are concentrated in firms that are plausibly more strongly affected by the directive, that is, those with previously low levels of both CSR reporting and CSR activities. Using various alternative outcome variables (e.g., new CSR initiatives, improvements in CSR infrastructure, or firm performance), we show that these real effects reflect meaningful increases in CSR beyond firms’ potential attempts to “greenwash” CSR performance. Finally, we conduct tests that increase our confidence that the documented real effects are attributable to the CSR Directive and not general EU trends in CSR.
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“and that they start doing so before the mandate comes into force.”
From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Fiechter et al. (2020)
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“Fiechter et al. (2020) examine the real effects around the disclosure mandate and find that firms, on average, increase their CSR activities in response to the regulation”
From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Fiechter et al. (2020)
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“The effects are stronger for firms with low levels of CSR expenditures prior to the regime change.”
From Mandatory CSR and sustainability reporting: economic analysis and literature review (2021) · cites this paper as Fiechter et al. (2020)
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Cites
Mandatory CSR and sustainability reporting: economic analysis and literature review
Christensen, H. B., Hail, L., & Leuz, C. (2021) · Review of Accounting Studies · doi:10.1007/s11142-021-09609-5 · Cited by 1,923
The Means and End of Greenwash
Lyon, T. P., & Montgomery, A. W. (2015) · Organization & Environment · doi:10.1177/1086026615575332 · Cited by 1,636
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- Online Appendix A: Entropy balancing matching and unmatched results Online Appendix B: Propensity score matching and covariate balance Online Appendix C: Distribution of the employee count in the pre-and post-regulation period Online Appendix D: Summary statistics
- Online Appendix E: Alternative clustering of standard errors
- Online Appendix F: Firm-level variation in exposure to CSR regulation and CSR reporting (Table 2) Online Appendix G: Pre-post difference-in-differences model (Tables 3 and 4) Online Appendix H: Information about hand-collection
- Online Appendix I: Alternative CSR outcome variables
- Online Appendix J: Effects of the CSR Directive on CSR infrastructure
- Online Appendix, Region�time fixed effects" and "Local CSR trend" analyses
- V References Atanasov, 2016, ) firms with less than 500 employees slightly varies across Panel A and Panel B due to different sample selection requirements (i.e., Panel B requires availability of all control variables, whereas Panel A only requires core identifying firm variables. In Panel C, the dependent variable is CSR Activities. High-and low-exposure firms are defined as in Table 4. Control variables are the same as those used in the main specification, Online Appendix L: Table 2 with control variables tabulated Online Appendix M: Table 3 with control variables tabulated Notes: Panel A reports the sample distribution underlying the construction of our "local CSR trend" variables (Panel C of Table 9, 5, 207
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Cited by
Sorted by citations
Mandatory CSR and sustainability reporting: economic analysis and literature review
Christensen, H. B., Hail, L., & Leuz, C. (2021) · Review of Accounting Studies · doi:10.1007/s11142-021-09609-5 · Cited by 1,923
“Fiechter et al. (2020) examine the real effects around the disclosure mandate and find that firms, on average, increase their CSR activities in response to the regulation, and 45 In a similar vein, Barth et al. (2017) find positive relations between CSR disclosure quality and future realized…”
Background
Metadata
- Authors
- Fiechter, P., Hitz, J.-M., & Lehmann, N.
- Affiliations
- University of Neuchâtel (CH)
- Erasmus University Rotterdam (NL)
- Corresponding author
- Fiechter, Peter
- Venue
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Published
- 2020
- Volume
- 60
- Issue
- 4
- Pages
- 1499-1549
- ISSN
- 0021-8456 (ISSN-L)
- 1556-5068
- OpenAlex
- W4212927050
- Cited by
- 429
- References
- 2
- Citations by year
- 2026: 115 · 2025: 129 · 2024: 101 · 2023: 54 · 2022: 15 · 2021: 8 · 2020: 3
- FWCI
- 21.35
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- other-oa
- Locations
- Journal of Accounting Research (publishedVersion, other-oa)
- SSRN Electronic Journal (publishedVersion)
- EUR Research Repository (Erasmus University Rotterdam) (publishedVersion, cc-by)
- EUR Research Repository (Erasmus University Rotterdam) (submittedVersion, cc-by)
- GoeScholar The Publication Server of the Georg-August-Universität Göttingen (Georg-August-Universität Göttingen) (submittedVersion, other-oa)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
- Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Governance and Financial Management
- Keywords
- corporate social responsibility, non-financial reporting, greenwashing, CSR practices, listed companies, regulatory compliance
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