Cho, Lee, and Pfeiffer (2012)

Cho, Seong, Cheol Lee, and Ray Pfeiffer. “Corporate Social Responsibility Performance Information and Information Asymmetry.” Working paper (Oakland University), June 2012.

From the authors’ abstract: “Using Corporate Social Responsibility (CSR) performance scores from KLD STAT, we investigate whether CSR performance information affects information asymmetry. We find that both positive and negative CSR performance information reduce information asymmetry. Moreover, we find that the influence of negative CSR performance information is much stronger than that of positive CSR performance information in reducing information asymmetry… Overall, our results suggest that CSR performance information plays a positive role for investors by reducing information asymmetry and that regulatory action may be appropriate to mitigate the adverse selection problem faced by less-informed investors.”

Link: https://www.sciencedirect.com/science/article/pii/S0278425412000804