A TRIO OF RESEARCHERS at Stuart School of Business at Illinois Institute of Technology is investigating the relationship between the social media activity of companies and the level of their corporate social responsibility, or CSR—that is, voluntary activities that benefit society, such as donating to charities or adopting fair-trade policies.
The research team found that establishing a Twitter account leads to a rise in a company’s CSR performance, compared to similar firms in the industry that are not on Twitter. When the company increases its engagement on the social media platform—more tweets, more followers—CSR outcomes rise even more.
“Social media has a causal effect [that] encourages a company to be aware of its image and to improve the accountability and transparency of its behavior, which is good for society overall,” says Associate Professor of Finance Yiwei Fang, who collaborated with Harold L. Stuart Endowed Chair in Business Siva K. Balasubramanian and Zihao Yang (Ph.D. MSC ’20) on the project.
They mined a decade’s worth of financial, CSR, and Twitter usage data on nearly 450 S&P 500 companies in their research for the paper, “Twitter Presence and Experience Improve Corporate Social Responsibility Outcomes,” which was published recently in the Journal of Business Ethics.
With this research showing the link between social media and CSR outcomes, Balasubramanian says, “Every person’s ability to enter the discussion [about corporate social responsibility] has been elevated to a level that we have not seen before.”