CSR Disclosure of Foreign versus U.S. Firms: Evidence from ADRs
Corporate social responsibility (CSR) is increasingly demanded by investors worldwide. In this article, we study whether foreign firms listed on U.S. capital markets are competitive to U.S. firms in providing better CSR disclosure. We also examine whether such transparency allows foreign firms to achieve a competitive advantage relative to their U.S. counterparts. Using environmental, social, and governance disclosure scores, we find that foreign firms disclose more than comparable U.S. firms, particularly in the environmental and social dimensions of CSR. Furthermore, we find consistent evidence that foreign stocks experience lower idiosyncratic volatility, better liquidity, and higher institutional ownership relative to other comparable U.S. stocks due to a higher CSR disclosure of foreign firms.
Chowdhury, Reza H.; Fu, Chengbo; Huang, Qiping; and Lin, Nanying. (2021). "CSR Disclosure of Foreign versus U.S. Firms: Evidence from ADRs". Journal of International Financial Markets, Institutions and Money, 70, 101275. https://doi.org/10.1016/j.intfin.2020.101275