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Synopsis

The research problem

This study investigated how firms employ corporate social responsibility (CSR) as a precautionary strategy in response to heightened concerns about cybersecurity following the adoption of data breach disclosure laws in the United States.

Motivation

CSR has garnered substantial attention in contemporary society. Simultaneously, the last few decades have witnessed a rapid surge of the digital economy. However, it remains unclear how CSR is adapting to digitalization. In this study, I focused on cybersecurity, a pivotal challenge in the digital age.

Theoretical reasoning

The enactment of data breach disclosure laws enhances the reporting of cybersecurity incidents and intensifies concerns about cybersecurity, promoting firms to take measures to mitigate the adverse impacts of data breaches. Building on the theory that CSR functions like an insurance policy, I hypothesized that firms increase their engagement in CSR to fortify their reputation after the enactment of data breach disclosure laws, helping cushion the potential impact of future breaches.

Analyses

The main analysis employed a difference-in-differences research design to compare the changes in CSR engagement between firms with high and low levels of cybersecurity risk following the enactment of data breach disclosure laws in the United States. Cross-sectional analyses delved into the underlying mechanisms. Additional analyses first explored the role of CSR in mitigating stock price decline and then illustrated reputational concerns after data breaches.

Findings

The main analysis showed that firms with high cybersecurity risk increase their CSR engagement to a greater extent following the adoption of data breach disclosure laws. CSR initiatives are particularly pronounced for firms likely to incur significant losses from data breaches, aligning with the theoretical framework and offering insight into the underlying mechanisms. I also found that firms with fewer financial constraints exhibit stronger CSR initiatives. Furthermore, these CSR initiatives are distinct and cannot be substituted by investments in information technology. The additional analysis illustrates that firms with superior CSR performance undergo a smaller stock price decline surrounding data breach announcements. This supports the notion that CSR functions much like insurance, shielding against the impacts of data breaches. Subsequently, this study presents direct evidence on firms’ concerns regarding the reputational impact of cybersecurity. Overall, this study underscores cybersecurity concerns as a driving force behind social responsibility initiatives in this digital era.

Target population

This research holds significance for policymakers worldwide who are considering cybersecurity-related regulations and for firms seeking effective risk management strategies in the face of cybersecurity challenges.

Synopsis

Research Problem

This study investigated the ramifications of the SEC’s choice not to adopt the International Financial Reporting Standards (IFRS) in 2012.

Motivation

The nonadoption of IFRS by the United States in 2012 raised worries about the country’s influence on IFRS and the standards’ potential divergence from U.S. Generally Accepted Accounting Principles (GAAP). Our analysis offers insights into the United States’ reengagement with the IFRS, the development of sustainability reporting standards, and the evolution of accounting standards.

Test Hypotheses

We hypothesize that the United States has not lost influence over IFRS, and the momentum for these standards has not waned post-2012.

Target Population

We examined countries and firms’ use of U.S. GAAP or IFRS standards, including foreign companies listed in U.S. exchanges.

Methodology

We conducted a robust review of scholarly literature, an analysis of arguments surrounding IFRS adoption in the United States, and a comparative study of IFRS and U.S. GAAP standards through 2022.

Analyses

We examined the historical attempts to integrate IFRS in the United States, market share trends of firms using IFRS, the enduring influence of the United States on IFRS standard setting, empirical evidence on eliminating the IFRS-to-U.S. GAAP reconciliation, and implications for global sustainability standards.

Findings

Our findings challenge the fear that the divergence between IFRS and U.S. GAAP has widened after 2012. IFRS market share increased from 53.3% in 2011 to 76.7% in 2022, refuting assertions of declining momentum. The U.S. influence over IFRS remains intact. The elimination of IFRS-to-U.S. GAAP reconciliation requirements shows mixed empirical effects, warranting further research on market adaptations and firm-specific outcomes in post-reconciliation environments. Our analysis supports the value of pursuing global ESG reporting standards and highlights the complex investor reactions to potential U.S. IFRS adoption.

The framework of this study is the field of crowdfunded microfinance that represents a way to scale up financial access, leveraging digital technology applications. A key element of this value chain is the field partner, represented by a local Microfinance Institution (MFI) that intermediates between the crowdfunding platform and the individual borrowers or group of borrowers. In this context, the main objective of this paper is to measure the financial and prosocial contributions of field partners through crowdfunded microloans. Methodologically, this prosocial impact is measured with an innovative approach, by using network theory to describe the supply and value chains that link crowdfunding investors to field partners and, consequently, to micro-borrowers. The main contribution of this study is the introduction of a global indicator able to quantify the increase of the social impact and the financial system of a country, coming from the presence of ESG-compliant crowdfunded microloans.

In a sustainable economy, each company’s level of carbon risk can change from period to period, but few studies have examined the association among a company’s carbon risk awareness and its level of environmental, social, and governance (ESG) performance. This article studies the effect of corporate-level carbon risk awareness on the ESG performance of China’s A-share listed companies during the period of 2013–2022. The results show a positive effect of carbon risk awareness on the level of companies’ ESG performance. The results also show that media coverage has a significant moderating effect on the relationship between carbon risk awareness and ESG performance. The authors present three factors through which carbon risk awareness affects ESG performance: (i) recognizing high carbon risks allows companies to decrease pollutants and greenhouse gas (GHG) emissions and increase environmental (E) scores; (ii) high carbon risk awareness encourages companies to take responsibility for social employment and improve social (S) outcomes; (iii) higher carbon risk awareness leads to better established sustainable management and higher governance (G) scores. This study plays a significant guiding role in improving corporate ESG practices.

The Sustainability Accounting Standards Board (SASB) is an independent nonprofit organization that sets standards for companies to use when disclosing Environmental, Social, and Governance (ESG) information to investors. SASB standards help companies publicly report consistent and comparable information about how they manage issues related to climate change, natural resource constraints, technological innovation, population growth, and more. As a result, the SASB standards enable investors to better understand how a company impacts — and is impacted by — a changing world. With this information in hand, investors can direct their capital to those companies that are being managed most effectively for the long term.