This paper investigates the local peer effects of corporate social responsibility (CSR). We find that a firm's CSR engagement comoves with that of other firms headquartered nearby. The results are robust when considering the nonlocal dominant industry CSR portfolio and different cross-region sensitivities to macro shocks. Moreover, the CSR of firms that change their headquarters location experiences an increase (decrease) in comovement with the CSR of firms in the new (old) location. We further explore several channels through which the local CSR comovement is motivated. We show that local CSR comovement is mainly driven by a firm's incentives to access financing. Besides, we find weak evidence that firms comove in CSR in order to set a positive image to the public and our findings do not support the agency channel of the local peer effects of CSR.

This paper presents evidence that distressed firms with politically connected executives and board members are more likely to reorganize outside of court than to file for Chapter 11 bankruptcy. This relation is more evident for firms that have more political importance, such as major employers within a state, firms located in swing states, and in periods leading up to major election dates. The evidence suggests that the expected costs of financial distress are lower for politically connected firms which may partially explain the higher leverage ratios of politically connected firms documented in the extant literature.