Management Accounting Section Midyear Meeting

The Effect of Internal Information Quality on Corporate Social Responsibility Performance

• In Event: Control Systems (Experimental) III

Abstract

This study investigates whether the quality of information available to decision makers within firms affects corporate social responsibility (CSR) performance. We find that internal information quality is positively associated with CSR performance. We also find that the effect of internal information quality is greater in settings where there are internal information asymmetries due to more employees, broader geographic footprint, and greater cash flow volatility. Using difference-in-differences analysis, we further find that internal control weakness remediation results in increased CSR performance. Our study contributes to the emerging CSR literature on internal factors that affect a firm’s CSR performance by demonstrating that higher quality internal information can improve CSR outcomes.

Authors

• Brent Lao, Illinois State University

• Gregory P McPhee, Clemson University