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Excess Insider Control And Corporate Social Responsibility: Evidence From Dual-Class Firms, Barry Hettler, Arno Forst, James Cordeiro, Stacy Chavez
Excess Insider Control And Corporate Social Responsibility: Evidence From Dual-Class Firms, Barry Hettler, Arno Forst, James Cordeiro, Stacy Chavez
School of Accountancy Faculty Publications and Presentations
We investigate the corporate social responsibility (CSR) performance of firms with a dual-class share structure. Dual-class firms, which represent a fast-growing segment of the U.S. capital market, violate the "one share, one vote" principle by giving corporate insiders control in excess of their economic interest in the firm. We observe a negative association of excess insider control and firms’ CSR performance, primarily with respect to the community- and employee-related dimensions of CSR. Extended analyses reveal that this negative association is mitigated by high financial resource availability. Consistent with a trade-off between corporate spending on CSR or on benefits for insiders, …