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Full-Text Articles in Business
The Impact Of Stakeholder Orientation On Tax Avoidance: Evidence From A Natural Experiment, Gary Chen, Ani Manakyan Mathers, Bin Wang, Xiaohong Wang
The Impact Of Stakeholder Orientation On Tax Avoidance: Evidence From A Natural Experiment, Gary Chen, Ani Manakyan Mathers, Bin Wang, Xiaohong Wang
Finance Faculty Research and Publications
We study the effect of stakeholder orientation on corporate tax avoidance. Using the staggered passage of constituency statutes across U.S. states between 1983 and 2006, we show that greater stakeholder orientation results in increased tax avoidance. We further find greater tax avoidance among firms with limited financial resources and that employees benefit from the change. Our results are consistent with stakeholder salience theory that resource-constrained managers prioritize the claims of salient stakeholders, such as employees, at the expense of secondary stakeholders, such as the government.
Relative Corporate Social Performance And Cost Of Equity Capital: International Evidence, Benjamin Lynch, Martha O'Hagan-Luff
Relative Corporate Social Performance And Cost Of Equity Capital: International Evidence, Benjamin Lynch, Martha O'Hagan-Luff
Articles
This research examines the relationship between firms' corporate social performance (CSP) and the implied cost of equity capital using a sample of 25,938 firm-year observation from 49 countries during the period from 2002 to 2021. Using estimates of the firms' ex ante cost of equity capital, we examine its relationship with industry-relative measures of the firms' CSP, its environmental and social pillars and sub-pillars. We find that increased overall CSP reduces a firm's cost of equity capital up until a point, beyond which the marginal benefits of further CSP investment decrease. We find that the social pillar is the main …
When Does Csr Payoff?, John A. Doukas, Rongyao Zhang
When Does Csr Payoff?, John A. Doukas, Rongyao Zhang
Finance Faculty Publications
We investigate whether firms engaging in corporate social responsibility (CSR) can preserve firm value during normal and unprecedented exogenous adverse events. Our evidence shows, in regular times, a negative relation between CSR engagement and firm value, but under adverse economic conditions, CSR protects firm value by decreasing firm risks. We also find that firms with high managerial attributes engage in greater CSR activities that benefit shareholders in both normal and aberrant financial times. Despite the controversy surrounding CSR, our evidence points out that CSR can be viewed as a set of intangible assets that can improve firm value across good …