Twitter Presence and Experience Improve Corporate Social Responsibility Outcomes

We investigate the role of social-media-triggered public pressure on corporate social responsibility (CSR) that includes expectations of transparency and accountability on the firm's part, and participative/evaluative inputs on the public's part. Using the date when S&P 500 firms established corporate Twitter accounts, we investigate the impact of corporate social media exposure on CSR outcomes. Results from baseline regressions indicate that firms with Twitter accounts significantly outperform industry peers in CSR rating, after controlling for firm and industry characteristics. To test potential reverse causality, we use a dynamic treatment effect model to explore within firm changes of CSR, and find that firms' CSR rating improves in year one- and year two after establishing a Twitter account, while no difference emerged in similar comparisons with peers prior to the Twitter account establishment. Additionally, Granger causality tests results show that corporate Twitter presence improves CSR performance; it is also shown that CSR outcomes do not motivate corporations to establish a social media presence on Twitter. Finally, firms with more experience (number of years) on Twitter, and those with more followers, tweets or Twitter accounts are associated with improved CSR outcomes. We draw on two theories and qualitative interviews with senior CSR executives to explain why social media influences CSR firm behaviors.