Research

CORPORATE SOCIAL RESPONSIBILITY AND FORCED MIGRATION:

A SIGNALING APPROACH

(with Marieke Huysentruyt, winner of the 2022 Carolyn Dexter All-Academy Award)

Question: Does community-level exposure to forced migration affect European firms' CSR portfolio choices?

Theory: Signaling framework wherein high-social-responsibility companies can use low-materiality CSR policies to signal their type to community stakeholders who care about social issues.

Hypothesis: On average, an increase in exposure to forced migration induces firms to shift their CSR portfolios towards policies with lower financial materiality.

Empirical Approach: Event studies using communities' proximity to tragic refugee incidents as a source of variation in the exposure to forced migration.

Results: Firms headquartered in communities where a tragic refugee incident occurs respond by progressively substituting low-materiality CSR policies for high-materiality actions; findings are also consistent with the specific equilibrium patterns suggested by the theoretical framework.