Full Event Description
Prof. Jason Kuang will present "From an accounting perspective, managers’ decisions to invest in CSR can be denominated in financial or nonfinancial terms, referred to as the measurement basis of decision making. Drawing on psychology theory, we posit that managers’ willingness to invest in CSR is affected by the choice of measurement basis. The use of a financial measurement basis likens the decision to that of other non-CSR projects, in which case a traditional cost-benefit analysis dictates the amount of investment. By comparison, the use of a nonfinancial measurement basis underscores the society-serving nature of CSR programs, thereby activating managers’ personal belief as to whether firms should sacrifice profits to pursue CSR projects. We hypothesize that the use of a nonfinancial measurement basis leads to greater investment in CSR, but only if managers are personally supportive of CSR initiatives. To test our hypothesis, we conduct a laboratory experiment in which participants make a CSR investment decision that has real benefits for society and economic consequences for themselves. The experimental findings are consistent with our hypothesis."
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