CEO power and corporate social responsibility decoupling

Shahab, Yasir; Gull, Ammar Ali; Ahsan, Tanveer; Mushtaq, Rizwan

doi:10.1080/13504851.2021.1966368

Cited by 40 publications

(59 citation statements)

References 11 publications

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“…The following control variables are applied, following prior literature (Li et al, 2021;McGuinness et al, 2017;Shahab et al, 2021;Yu, 2008;M. Zhang et al, 2015): firm size (SIZE), return on total assets (ROA), financial leverage (LEV), firm growth (GROWTH), independent directors' percentage among the board (INDEP), years of listing (AGE), CEO duality (DUAL), institutional ownership (INST), and corporate ownership type (SOE), as well as year fixed effects (YEAR) and industry dummies (INDUSTRY).…”

Section: Control Variables and Baseline Modelmentioning

confidence: 99%

Analyst coverage and corporate social responsibility decoupling: Evidence from China

Zhang

2021

Corp Soc Responsibility Env

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This study investigates the impact of analyst coverage on corporate social responsibility (CSR) decoupling using a sample of listed firms in China for 2010–2019. Results reveal that analyst coverage decreases CSR decoupling, and that the negative association is more pronounced for non‐state‐owned firms and for firms with high information asymmetry. The baseline results remain consistent after application of several robustness and endogeneity tests, including two‐stage least squares (2SLS) and Heckman two‐stage analysis. The results extend the literature on analyst coverage and scarce studies on determinants of CSR decoupling. Practitioners may alleviate CSR decoupling by properly using the monitoring role of financial analysts in corporate governance.

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Section: Control Variables and Baseline Modelmentioning

confidence: 99%

Analyst coverage and corporate social responsibility decoupling: Evidence from China

Zhang

2021

Corp Soc Responsibility Env

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“…External actions generally focus on communication and visible disclosure that firms adopt to create a good reputation in the views of the public, including the commitment and statement of CSR practices and so on, which reflects firm’s CSD level. There are three main types of definition for CSR decoupling: (1) the difference between a firm’s CSD level rated by third-party ratings and its actual CSR performance or inputs ( García-Sánchez et al, 2020 ; Zhong et al, 2021 ); (2) the difference between internal (e.g., employee welfare expenditure) and external CSR actions (e.g., employee improvement commitment; Sánchez et al, 2021 ; Shahab et al, 2021 ); (3) the difference between level of optimistic tone from CSR reports and CSR performance ( Sauerwald and Su, 2019 ; Zhang, 2021 ).…”

Section: Methodsmentioning

confidence: 99%

“… Tashman et al (2019) based on the neo-institutional theory, argue that institutional characteristics in different markets drive CSR decoupling of multinational enterprises. Based on the agency theory, Shahab et al (2021) argue that more powerful CEOs are more short-sighted and have higher CSR decoupling in their firms; Parra-Domínguez et al (2021) find that CSR decoupling is lower in family firms, because the family firms suffer lower agency cost. Based on the overconfidence theory, Sauerwald and Su (2019) find that managerial overconfidence increases CSR decoupling.…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

“…However, these studies implicitly assume that the firm discloses its CSP truthfully and no misalignment between its CSP and corporate social disclosure (CSD). In the real world, the existence of information asymmetry, moral hazard and so on leads to a misalignment between CSD and actual CSP, that is, CSR decoupling ( García-Sánchez et al, 2020 ; Sánchez et al, 2021 ; Shahab et al, 2021 ). Specifically, some firms adopt symbolic management in their CSR practices and tend to disguise and exaggerate their actual CSP levels by making excessive and selective CSD ( Walker and Wan, 2012 ; Mahoney et al, 2013 ; Yu et al, 2020 ).…”

Section: Introductionmentioning

confidence: 99%

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Board Network and CSR Decoupling: Evidence From China

et al. 2022

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This paper investigates the influence of board network centrality on corporate social responsibility (CSR) decoupling. CSR decoupling refers to the gap between corporate internal and external actions in CSR practices. Specifically, we measure CSR decoupling as the difference between corporate social disclosure (CSD) and corporate social performance (CSP). This paper uses a sample of Chinese A-share listed firms during 2009–2018, takes the technical dimension score (T-score) and content dimension score (C-score) of RKS ratings as proxies of CSD and CSP, and obtains CSR decoupling as the difference between CSD and CSP. Our results show that (1) board network centrality is positively related to over-decoupling in the pre-adoption period (2009–2014) of the new environmental law but negatively related to over-decoupling in the post-adoption period (2015–2018) and (2) centrality is not related to under-decoupling in the pre-adoption period but a significantly positive related in the post-adoption period. Our finding reveals a complex role of the board network in CSR practices in China.

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“…In addition, information asymmetry not only increases the financial constraint for the firm but also increases the cost associated with the financing of the projects (Myers and Majluf, 1984). Due to the information asymmetry, managers take the additional funds from capital providers and use them for empire-building and decoupling activities (Shahab et al, 2021). On the contrary, if capital providers are aware of information asymmetry, they restrict capital to the managers.…”

Section: Contextual Settings Of the Studymentioning

confidence: 99%

The jinx of real earnings management: evidence from inefficient investments and debt maturity structure in Pakistan

Bhutta

AlHares

Shahab

et al. 2021

JAEE

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PurposeThis study aims to investigate two important research questions. First, this research examines the impact of real earnings management on investment inefficiency of the non-financial listed firms in Pakistan. Second, this research further explores the moderating role of short-term debt on the nexus between real earnings management and investment inefficiency. This study attempts to highlight an important research problem i.e. the jinx of real earnings management from the context of an emerging economy.Design/methodology/approachThis study employs the data from non-financial listed firms in Pakistan over the period from 2008 to 2018. The study uses panel data methodologies with firm and year fixed-effects to examine the proposed hypotheses. The results are robust to the use of sensitivity analysis, different estimation techniques and endogeneity issues (using two-stage least squares (2SLS) and generalized method of moments (GMM) techniques).FindingsThe results of the research are twofold. First, consistent with the theoretical arguments, the findings reveal that real earnings management increases investment inefficiency and results in over-investments by the firms. Second, short-term debt attenuates the relationship between real earnings management and investment inefficiency. It implies that a higher level of short-term debt weakens the adverse effects of real earnings management on the investment efficiency of the firm.Originality/valueThis study offers original findings on the issues pertaining to the quality of accounting and financial reporting in an emerging economy like Pakistan, where the implementation of regulations is weak in the corporate world and management frequently exploits shareholders' wealth for the short-term benefits.

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CEO power and corporate social responsibility decoupling

Cited by 40 publications

References 11 publications

Analyst coverage and corporate social responsibility decoupling: Evidence from China

Analyst coverage and corporate social responsibility decoupling: Evidence from China

Board Network and CSR Decoupling: Evidence From China

The jinx of real earnings management: evidence from inefficient investments and debt maturity structure in Pakistan

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