Corporate Social Responsibility and Corporate Misconduct: A Review of Empirical Research and Future Research Recommendations

ABSTRACT This study reviews 54 empirical‐quantitative (archival) articles on the relationship between corporate social responsibility (CSR) outcomes and corporate misconduct. Based on the moral licensing and moral track hypotheses, we distinguish between CSR performance, reporting, and assurance on the one hand and between financial and CSR‐related misconduct (restatements, fraud, and enforcement actions) on the other hand. We find that most studies analyzed the impact of CSR on corporate misconduct for Chinese and US firms. There are indications that CSR performance decreases the level of financial fraud in these regimes. Other variables are either low in number or lead to inconclusive results. In discussing potential future research, we stress the need for analyzing a potential dynamic and non‐linear link, focusing on CSR reporting and assurance, CSR‐related misconduct and cross‐country designs. Our study is also highly relevant for standard setters to decrease the probability of corporate misconduct by extended CSR regulations.