Corporations and Legislation: An Analysis of Corporate Social Responsibility Practices and Law

Author/​Artist
McDonald, Elizabeth [Browse]
Format
Senior thesis
Language
English
Description
93 pages

Details

Advisor(s)
Hong, Harrison [Browse]
Department
Princeton University. Department of Economics [Browse]
Class year
2016
Summary note
The firm is a microcosm of society: it brings members into a select community and therefore has an intrinsic influence on the community’s culture. Companies also use their influence by lobbying governments to enact social laws. However, the overall impact a firm has on the social norms and values of society reflected in governmental legislation is unclear. This paper uses MSCI KLD Environmental, Social and Governance (ESG) performance indicators to analyze the relationship between expanded corporate social responsibility practices and the legalization of same-sex marriage on the state level. This study finds that states with higher average ESG scores were more likely to legalize same-sex marriage, and did so earlier than comparable states with lower ESG scores. Furthermore, the models show that higher ESG scores tend to precede changes in legislation. While it cannot be conclusively proven, the directionality and significance of the results in this study support the theory that changes in corporate behavior may in fact be influential on legislation.

Supplementary Information