Benlemlih, Mohammed. “Why do socially responsible firms pay more dividends?” Working paper (University of Grenoble), October 1, 2014.
From the author's abstract: "Using a sample of 22,389 US firm-year observations over the period from 1991 to 2012, we find that high CSR firms pay more dividends than low CSR firms. This is consistent with our expectation that socially responsible firms may use dividend policy to manage the agency problems related to overinvestment in CSR. [B]y analyzing the stability of dividend payout, we find that socially irresponsible firms adjust dividends quicker than do socially responsible firms: dividend payout is more stable in high CSR firms than in low CSR firms. Additional results show that firms involved in two controversial activities: military and alcohol are associated with low dividend payout which is likely due to the high cost of external funding for these firms as highlighted by Goss and Roberts (2011).
LK comment: Also consistent with the idea that high CSR companies sometimes use these projects to hide or smooth excess cash flows.