Working Paper: NBER ID: w24169
Authors: John A. List; Fatemeh Momeni
Abstract: Corporate Social Responsibility (CSR) has become a cornerstone of modern business practice, developing from a “why” in the 1960s to a “must” today. Early empirical evidence on both the demand and supply sides has largely confirmed CSR's efficacy. This paper combines theory with a large-scale natural field experiment to connect CSR to an important but often neglected behavior: employee misconduct and shirking. Through employing more than 3000 workers, we find that our usage of CSR increases employee misbehavior - 20% more employees act detrimentally toward our firm by shirking on their primary job duty when we introduce CSR. Complementary treatments suggest that “moral licensing” is at work, in that the “doing good” nature of CSR induces workers to misbehave on another dimension that hurts the firm. In this way, our data highlight a potential dark cloud of CSR, and serve to forewarn that such business practices should not be blindly applied.
Keywords: Corporate Social Responsibility; Employee Misbehavior; Moral Licensing
JEL Codes: C93; D03
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CSR framing as benevolent act (H84) | higher incidence of cheating (K42) |
| CSR (M14) | employee shirking (J22) |
| CSR (M14) | increased share of workers who cheat (J79) |
| CSR (M14) | average level of cheating (C70) |
| substituting wage incentives with CSR (J38) | increase in cheating behavior (C92) |
| CSR (M14) | quality of work produced (L15) |