Socially responsible firms

Socially responsible firms

In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy...

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Bibliographic Details
Main Authors: FERRELL, Allen, Hao LIANG, RENNEBOOG, Luc
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2016
Subjects:
Corporate social responsibility
Agency costs
Corporate governance
Business Law, Public Responsibility, and Ethics
Corporate Finance
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/5004
https://ink.library.smu.edu.sg/context/lkcsb_research/article/6003/viewcontent/SociallyResponsibleFirms_JFE_final.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy by means of an instrumental variable approach, we find that well-governed firms that suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find that a positive relation exists between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.

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