managers with greater incentives to overinvest in CSR and thereby report strong CSR performance. In turn, investors will seek …

We develop the concept of stakeholder salience to account for stakeholders who should matter to the firm, even when … managers do not perceive them as important. While managers are responsible for attributing salience to stakeholders, they can … overlook or ignore stakeholder importance because of market frictions that affect managerial perceptions or induce opportunism …