Strange Bedfellows? - Voluntary CSR Disclosure and Politics

We show a reliable association between voluntary CSR disclosure and company political interests, which we proxy by company employees' contributions to political action committees and statewide voting in presidential elections. This relation is most pronounced for the contributions of Democratic employees at companies in states that vote for the Democratic presidential candidate. We also show a positive association between corporate political contributions and excess stock returns. A portfolio strategy of investing based on company size, CSR disclosure intensity, and corporate political contributions produces a significant positive mean excess stock return of 4.5 percent over three months following CSR disclosure