Do socially responsible managers forecast sales more accurately?

Abstract

Purpose

This paper aims to examine whether corporate social responsibility (CSR) is related to management sales forecast accuracy.

Design/methodology/approach

Use KLD measures of corporate responsibility combined with forecast accuracy regression model, including controls for management skills and expertise.

Findings

Socially responsible firms commit forecast errors of lower magnitude and sales forecast accuracy is positively related to the level of CSR.

Research limitations/implications

A strong motive for research on the field of CSR topic under the scope of reporting quality. Future research could focus on alternative measures of CSR; such as announcements included into the financial statements or separately disclosed expenses. Examine the magnitude of confirmed relation, among different economies worldwide.

Practical implications

CSR effect on manager sales forecasting activity, highlight the impact of brand awareness and customer loyalty, as created by implementing CSR strategies, on firm growth and sales expansion.

Social implications

The research enhances the era towards more socially responsible firms, presenting evidence of such an adoption on corporate fundamentals.

Originality/value

To the knowledge there is no prior research examining the implications of CSR on sales forecast accuracy.

Citation

Chronopoulos, P. (2022), "Do socially responsible managers forecast sales more accurately?", Journal of Financial Reporting and Accounting, Vol. 20 No. 3/4, pp. 734-752. https://doi.org/10.1108/JFRA-07-2020-0206