Corporate social responsibility and annual report reading difficulty

We use more than 21,000 firm-year observations for 2534 U.S. companies between 1993 and 2018 to investigate the relationship between corporate social responsibility performance and the reading difficulty of annual reports. We find a significant negative relationship, suggesting that the annual reports of socially responsible firms are more readable (i.e., easier to read and understand). Overall, our results suggest that socially responsible firms are more ethical and transparent, which is consistent with the stakeholder view.