The Influence of Ownership Concentration on Firm Resource Allocations to Employee Relations, External Social Actions, and Environmental Action

The Effects of Voting Ownership Concentration on Social and Environmental Disclosure: Empirical Evidence from Brazil

“…Controlling shareholders tend to have a long-term interest in the firm compared to minority shareholders, who can easily direct their investments to other firms. The long-term objectives would be related to a concern about improving firm image and prestige, which in turn would be related to firm reputation and legitimacy of activities (Bebbington, Larrinaga-González, & Moneva-Abadía, 2008;Crisóstomo & Freire, 2015). These concerns are aligned with the expected potential of CSR for firm value creation, which also involves a medium-and long-term perspective that may conflict with short-term return interests on the part of minority shareholders.…”

“…Ownership concentration has been shown to be able to interfere with firm policies, including social and environmental policy (Crisóstomo, & Freire, 2015;Okimura, Silveira, & Rocha, 2007). In this context, the disclosure of firm social and environmental information helps the process of firm legitimacy with external stakeholders.…”

“…In this context, the disclosure of firm social and environmental information helps the process of firm legitimacy with external stakeholders. In this framework, controlling shareholders, usually with a longer-term perspective to remain in the firm's ownership, may be more interested in the search for legitimacy than minority shareholders, and this may lead to a greater volume of social and environmental disclosure (Barnea & Rubin, 2010;Crisóstomo & Freire, 2015;Faller & Knyphausen, 2016;Li & Zhang, 2010).…”

“…The search for legitimacy of firm actions, and the concern with firm image and reputation, may encourage investments in social and environmental responsibility with the respective intensification of its disclosure (Bebbington, Larrinaga-González, & Moneva-Abadía, 2008;Brown, Guidry, Patten, 2009). In this context, studies still point to an association between these concerns and aspects of ownership structure (Barnes & Rubin, 2010;Crisóstomo & Freire, 2015;Rees & Rodionova, 2015).…”

“…Ownership concentration has been shown in the literature to be able to interfere in several firm policies, including social and environmental policy (Crisóstomo & Freire, 2015;Okimura, Silveira, & Rocha, 2007). This association may be caused by agency conflicts.…”