Which CSR activities are more consequential? Evidence from the Great Recession

We exploit the Great Recession of 2008 to study how firms view corporate social responsibility (CSR). When confronted with an adverse exogenous shock, firms are forced to prioritize. Our results show that, during the Great Recession, firms do not lessen their overall CSR investments, suggesting that they recognize the importance of CSR. However, further analysis shows that firms substantially reduce investments in five CSR activities (Community, Employee, Environment, Human Rights, and Product), while increasing investments in two CSR activities (Corporate Governance and Diversity). Firms appear to view some CSR activities as more essential to the strategic direction of the firm than others. Firms appear to view some CSR activities as more essential to the strategic direction of the firm than others.