Abstract: We show that firms hype-up their corporate social responsibility (CSR) narratives during the turn-of-the-year earnings conference calls to project an overly responsible public image of their firms. This previously unex-plored phenomenon does not appear to be related to past and subsequent CSR engagements and cannot be explained by observed time-varying firm attributes and unobserved time-invariant firm and CEO attributes. We find that the fourth quarter CSR narrative hike is more pronounced among firms that are (ex-ante) ex-pected to do more corporate good as well as firms embedded in dirty industries, but less prevalent among firms facing elevated product-market threats. Although elevated CSR narrative is associated with positive short-term market reaction and lower near-term stock price crash risk, such behavior tends to reduce financial report readability and leads to lower equity valuation in the longer term. Our analyses suggest that CSR nar-rative hike at the turn-of-the-year is a pervasive phenomenon in the corporate landscape and may have sig-nificant valuation and governance implications.
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