The Effect of Corporate Governance on Corporate Social Responsibility
| Autor: | Jang-Chul Kim, Pandej Chintrakarn, Young Sang Kim, Pornsit Jiraporn |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
050208 finance
business.industry Corporate governance media_common.quotation_subject 05 social sciences Stakeholder Principal–agent problem Accounting Project governance Shareholder 0502 economics and business Corporate social responsibility Quality (business) Business 050203 business & management Finance Corporate security media_common |
| Zdroj: | Asia-Pacific Journal of Financial Studies. 45:102-123 |
| ISSN: | 2041-9945 |
| DOI: | 10.1111/ajfs.12121 |
| Popis: | Motivated by agency theory, we explore the effect of corporate governance quality on corporate social responsibility (CSR), using the governance standards provided by Institutional Shareholder Services (ISS). Our evidence reveals that firms with more effective governance make significantly less investment in CSR. It appears that managers tend to over-invest in CSR and are forced to reduce CSR investments when corporate governance is more effective. In particular, an improvement in governance quality by one standard deviation translates into a decline in CSR investments by 7.16%. Our fixed-effects analysis also shows that, within firms, when governance quality improves over time, CSR investments decline significantly. Using the passage of the Sarbanes-Oxley Act of 2002 as an exogenous shock that improves the quality of corporate governance, we demonstrate that high-quality governance is not merely associated with, but rather brings about, lower CSR investments. |
| Databáze: | OpenAIRE |
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