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Full-Text Articles in Business Law, Public Responsibility, and Ethics
Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog
Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog
Research Collection Lee Kong Chian School Of Business
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.
Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog
Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog
Research Collection Lee Kong Chian School Of Business
In the corporate finance tradition starting with Berle & Means (1923), corporations should generally be run so as to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR as an agency problem and a waste of corporate resources. Given our identification strategy by means of an IV approach, we find that well-governed firms who 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 a positive relation between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.