Publication Type
Working Paper
Version
publishedVersion
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
Citation
FERRELL, Allen; Hao LIANG; and RENNEBOOG, Luc.
Socially responsible firms. (2016). 1-69.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4962
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://ssrn.com/abstract=2464561