Research

CORPORATE SOCIAL RESPONSIBILITY AND FORCED MIGRATION:

A SIGNALING APPROACH

(with Marieke Huysentruyt)

My job market paper studies whether and how local exposure to a social issue may affect a firm’s CSR portfolio composition. We propose a signaling framework whereby high-social-responsibility companies can use low-materiality CSR policies to signal their type to community stakeholders who care about a social issue, while incentives for this signaling behavior increase with the community's exposure to the social issue. This theory is tested in the context of forced migration to Europe. We leverage a novel empirical strategy using communities' proximity to tragic refugee incidents as a source of variation in their exposure to forced migration. Our results suggest that firms headquartered in communities with higher exposure to forced migration progressively substitute low-materiality CSR policies for high-materiality actions, in line with the equilibrium patterns suggested by our theoretical framework.