Religiosity and Corporate Social Responsibility

Abstract

This paper examines the hypothesis that religious firms are more socially responsible. By utilizing a novel measure of religiosity that reflects firm-level adherence to Christian values, we find that religiousness is positively associated with the CSR performance of large U.S. firms after controlling for state-level religiosity and various firm characteristics. Specifically, religious firms have better social and environmental responsibility scores and the documented positive relationship is particularly strong with respect to CSR strategy, product responsibility, and responsible use of resources. Overall, our empirical findings suggest that faith-driven corporate policies and values may encourage socially responsible behavior.