Publication Type

Working Paper

Publication Date

8-2016

Abstract

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.

Keywords

corporate social responsibility, agency problems, value enhancement, corporate governance

Discipline

Business Law, Public Responsibility, and Ethics | Corporate Finance

Research Areas

Finance

First Page

1

Last Page

69

Publisher

European Corporate Governance Institute, Finance Working Paper No. 432/2014

City or Country

Brussels

Additional URL

http://ssrn.com/abstract=2464561

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