Labor Pressure and Capital Structure as Joint Determinants of Voluntary CSR Reports
Keywords:
CSR, Voluntary Disclosure, Labor Economics, Stakeholder SystemsAbstract
We consider voluntary corporate social responsibility (CSR) reporting in the United States as a unique setting to examine the interaction of stakeholder pressure and capital structure policy on voluntary disclosure activity. We find the likelihood of CSR reporting is statistically higher when both labor pressure and leverage are higher. Our findings suggest it is the system of stakeholders and firm policies (capital structure) that collectively impact the likelihood of voluntary CSR reporting. We contribute to the literature by expanding our understanding of labor’s influence on firm activities and highlighting how our interpretation of voluntary disclosure is improved by considering the interactive influences of multiple stakeholders and firm policies. We extend prior literature by explicating the interaction of multiple stakeholders in our empirical analyses. And we contribute to the literature by helping better understand how the demand for voluntary non-financial disclosure arises from the conflicting interests of multiple stakeholders. The findings in this study can be used to model and examine further the debt shield tactics used during labor negotiations and to discern the broad impacts of debt shield tactics on labor cost, debt servicing costs and reporting.
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