Causal relation between corporate governance (CG) and corporate social responsibility (CSR)

What is it about?

This study examines the previously untested causal relation between corporate governance (CG) and firms' CSR performance and find that CG has a causal effect on CSR, but not the other way around. After controlling for the endogeneity issue, this study finds a positive relation between CSR and corporate financial performance (CFP).

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Why is it important?

Firms with more effective corporate governance tend to have better CSR performance.