| A BEHAVIORAL THEORY OF NONMARKET STRATEGY: THE CASE OF CSR REPORTING IN CHINA |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: Nonmarket strategy; Corporate social responsibility (CSR); CSR reporting; Behavioral theory of the firm; Performance feedback; Analyst forecasts. |
| Author Name | Affiliation | | Xiaoping Zhao* | Shanghai Jiao Tong University | | Audrey J. Murrell0 | University of Pittsburgh | | Shouming Chen0 | Tongji University |
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Abstract: |
| Firms behaviors and strategy are influenced by performance feedback. However, there is little theoretical underpinning to explain why and how performance feedback enables managers to change nonmarket strategy such as CSR reporting. We fill this research void with a behavioral model of CSR reporting. Drawing on the two rules of the behavioral theory of the firm, we suggest that managers tend to adjust CSR disclosures depending on the financial performance feedback based on analyst forecasts. Using a sample of Chinese listed firms during 2009-2013, we find empirical support for our theory. Our behavioral theory of CSR reporting contributes to literature nonmarket strategy and CSR reporting. |
