Publication Type
Journal Article
Version
acceptedVersion
Publication Date
12-2016
Abstract
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.
Keywords
Corporate social responsibility, Agency costs, Corporate governance
Discipline
Business Law, Public Responsibility, and Ethics | Corporate Finance
Research Areas
Finance
Publication
Journal of Financial Economics
Volume
122
Issue
3
First Page
585
Last Page
606
ISSN
0304-405X
Identifier
10.1016/j.jfineco.2015.12.003
Publisher
Elsevier
Citation
FERRELL, Allen; Hao LIANG; and RENNEBOOG, Luc.
Socially responsible firms. (2016). Journal of Financial Economics. 122, (3), 585-606.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5004
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jfineco.2015.12.003