Overselling corporate social responsibility

Abstract We show that firms hype up their corporate social responsibility (CSR) narratives during the turn‐of‐the‐year earnings conference calls to project an overly responsible public image of firms. This previously unexplored phenomenon does not appear be related past, current, and future CSR engagements cannot explained by observed time‐varying firm attributes unobserved time‐invariant CEO attributes. find fourth‐quarter narrative hike is more pronounced among are (ex ante) expected do good as well embedded in dirty industries, but less prevalent facing elevated product‐market threats. Although associated with positive short‐term market reaction lower near‐term stock price crash risk, such behavior tends reduce financial report readability leads equity valuation longer term. Our analyses suggest at a pervasive landscape may have governance implications.