Evaluating corporate social responsibility performance: social norms versus market norms

Purpose This study examines how behavioral norms influence investor judgments based on corporate social responsibility (CSR) disclosures. Design/methodology/approach We conduct laboratory experiments to compare investors' CSR- and investment-related judgments under social and market norm conditions. The experimental design enables us to establish causal relationships between behavioral norms and investor reactions and to identify the mechanisms underlying investors' responses to CSR information. Findings The results show a significant interaction between behavioral norms and the investment horizons. When making long-term investments, market-norm investors assign higher economic value to CSR than social-norm investors, leading to more favorable assessments of firms' investment prospects. Furthermore, social-norm investors show stronger emotional support for CSR, which weakens its economic influence and lowers their market-based investment judgments. These effects together lead to higher investment evaluations under market norms. However, for short-term investments, CSR offers no apparent economic benefit, and investment assessments do not differ significantly across norm conditions. Originality/value This study improves the understanding of how investors interpret CSR information by highlighting the influence of social and moral considerations on investment judgments. The findings also provide practical implications for managers, policymakers, and investors seeking to improve CSR communication and investment decision-making.