Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2023
Abstract
Firms located in communities in which people are, on average, more trusting enjoy some benefits in terms of the power of CEO contracts. We present two pieces of empirical evidence to support this claim: (1) higher average trust in a county is associated with “flatter” executive contracts and (2) when an exogenous shock occurs (such as a scandal involving an important social institution), both trust and contracting move in similar directions. We obtain the first result in a panel specification and the second in a “difference-in-difference” specification that uses the revelation of sex scandals involving the Catholic Church across different U.S. localities.
Keywords
Church scandals, Community trust, Firm management
Discipline
Accounting | Business Law, Public Responsibility, and Ethics | Corporate Finance
Research Areas
Corporate Governance, Auditing and Risk Management
Publication
Journal of Business Ethics
Volume
82
Issue
2
First Page
421
Last Page
442
ISSN
0167-4544
Identifier
10.1007/s10551-021-04996-w
Publisher
Springer Verlag (Germany)
Citation
HILARY, Gilles and HUANG, Sterling.
Trust and contracting: Evidence from church sex scandals. (2023). Journal of Business Ethics. 82, (2), 421-442.
Available at: https://ink.library.smu.edu.sg/soa_research/1986
Copyright Owner and License
Publisher
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/10.1007/s10551-021-04996-w
Included in
Accounting Commons, Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons