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- Keyword
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- Collectivism; national culture; costs of high leverage; stakeholder theory; predation theory (1)
- Corporate social responsibility; costs of high leverage; stakeholder theory of capital structure (1)
- Financial interdepdendence; comovements; European stock markets; PIIGS; Brexit; copulas; global financial crisis (1)
Articles 1 - 3 of 3
Full-Text Articles in Finance and Financial Management
Does Corporate Social Responsibility Reduce The Costs Of High Leverage? Evidence From Capital Structure And Product Market Interactions, Kee-Hong Bae, Sadok El Ghoul, Omrane Guedhami, Chuck C.Y. Kwok, Ying Zheng
Does Corporate Social Responsibility Reduce The Costs Of High Leverage? Evidence From Capital Structure And Product Market Interactions, Kee-Hong Bae, Sadok El Ghoul, Omrane Guedhami, Chuck C.Y. Kwok, Ying Zheng
Finance Department Faculty Journal Articles
Research on capital structure and product market interactions shows that high leverage is associated with substantial losses in market share due to unfavorable actions by customers and competitors. We examine whether corporate social responsibility (CSR) affects firms’ interactions with customers and competitors, and whether it can reduce the costs of high leverage. We find that CSR reduces losses in market share when firms are highly leveraged. By reducing adverse behavior by customers and competitors, CSR helps highly leveraged firms keep customers and guard against rivals’ predation. Our results support the stakeholder value maximization view of CSR.
Collectivism And The Costs Of High Leverage, Sadok El Ghoul, Omrane Guedhami, Chuck C.Y. Kwok, Ying Zheng
Collectivism And The Costs Of High Leverage, Sadok El Ghoul, Omrane Guedhami, Chuck C.Y. Kwok, Ying Zheng
Finance Department Faculty Journal Articles
Prior literature shows that high leverage is associated with losses in market share due to unfavorable actions by customers and competitors. Building on this literature, we investigate the effect of collectivism on the product market performance of highly leveraged firms. Using a sample of 46 countries over the 1989–2016 period, we find significantly lower costs of high leverage for countries with higher collectivism scores. Moreover, we find that the impact of collectivism on high leverage costs is more pronounced for firms with high product specialization and with financially healthy rivals. In additional analysis, we find that collectivism helps highly leveraged …
The Core, Periphery, And Beyond: Stock Market Comovements Among Eu And Non-Eu Countries, Michael A. Goldstein, Joseph Mccarthy, Alexei G. Orlov
The Core, Periphery, And Beyond: Stock Market Comovements Among Eu And Non-Eu Countries, Michael A. Goldstein, Joseph Mccarthy, Alexei G. Orlov
Finance Department Faculty Journal Articles
We thank conference participants at the 2016 Financial Management Association and our discussant Fernando Moreira, and two anonymous referees for immensely helpful comments. We also thank Andrew Patton and James P. LeSage for sharing their MATLAB codes for computing quantile dependence. The authors of this paper are responsible for any errors or omissions. The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the authors and do not necessarily reflect the views of the Commission or the authors' colleagues on …