Accounting & Finance Research Community Seminar – Xuejun Jiang

Title: Role of Corporate Social Responsibility in Sin Firms: Evidence from Arms Companies’ Responses to Local Soldier Fatalities

Date: 8th March 2023

Time: 13:00 – 14:00

Location: NUBS 2.13

Guest Speaker: Xuejian Jiang, NUBS

Abstract:

Firms that operate in sin industries often face significant disapproval from society because their products and services contradict social norms. In this study, we examine the mechanisms that are adopted by sin firms to manage public disapproval. Using soldier fatalities as a source of heightened public disapproval toward arms companies during the wars in Afghanistan and Iraq, we find a positive association between local soldier fatalities and local arms companies’ humanitarian-related corporate social responsibility (CSR) performances. Additional analyses suggest that this effect is more pronounced for arms companies that have Democratic-leaning political environments, higher levels of institutional ownership, and CEOs who have fewer career concerns. Further analysis shows that local arms companies are more likely to issue a standalone CSR report following an increase in local soldier fatalities. Overall, this study suggests that arms companies improve their humanitarian-related CSR performances to manage heightened public disapproval.