Do Firms Appear to Be More Socially Responsible When They Are Committing Financial Fraud?

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review

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Detail(s)

Original languageEnglish
Publication statusPublished - 3 Apr 2016

Conference

Title2016 Management Theory and Practice Conference
LocationKyoto University
PlaceJapan
CityKyoto
Period3 - 4 April 2016

Abstract

This study investigates whether firms adjust their socially responsible activities when committing financial fraud. Using propensity score matching to select control firms that have a similar probability of fraud in the pre-fraud benchmark period, we find that fraud firms achieve significantly higher corporate social responsibility (CSR) scores in the fraud committing period compared with the CSR scores for non-fraud control firms and in their own pre-fraud benchmark periods. We also find that fraud firms invest in both stakeholder and third-party CSR categories and more in CSR strengths. Furthermore, the improved CSR performance is more pronounced for firms located in high-religiosity states and that have longer fraud duration. Overall, our findings suggest that CSR is used as a strategic tool to cover up fraudulent activities.

Citation Format(s)

Do Firms Appear to Be More Socially Responsible When They Are Committing Financial Fraud? / Kim, Jeong-Bon; WU, Haibin; YU, Yangxin.

2016. Paper presented at 2016 Management Theory and Practice Conference, Kyoto, Japan.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review