Study reveals corporate social responsibility boosts firm production efficiency
The article explores how to address a common issue in corporate social responsibility (CSR) research. By adjusting a neoclassical production model to include CSR, the researchers show that not accounting for this can lead to incorrect conclusions about CSR's impact on firm production. When they use a two-stage method to control for this issue, the negative impact disappears. This study demonstrates the importance of considering endogeneity in CSR research and provides a useful technique to do so.