Corporate social responsibility and firm financial risk reduction: On the moderating role of the legal environment

Benlemlih, Mohammed; Girerd‐Potin, Isabelle

doi:10.1111/jbfa.12251

Cited by 139 publications

(118 citation statements)

References 90 publications

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“…Corporate social responsibility (CSR) practices can impact firm value around the world (e.g., Benlemlih & Girerd‐Potin, ; Cellier, Chollet, & Gajewski, ; Gregory, Whittaker, & Yan, ). Cellier et al.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Employee treatment and firm innovation

Mao

Weathers

2019

Business Fin & Account

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We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of 'good' employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation.These opposing views merit investigation since human capital is increasingly essential to the growth and success of a firm. Using the KLD database and patent/citation data, we find a significant positive relationship between favorable employee treatment and the innovation quantity and quality of a firm. Furthermore, we find that the positive treatment of employees improves innovation focus -more innovation related to firms' core business, leading to greater firm value via the increased economic value of patents. These findings, robust to endogeneity concerns, provide support for the long-term incentive hypothesis, suggesting that well-treated employees increase firm innovation. Thus, firm innovation represents a channel through which positive employee treatment enhances firm value. K E Y W O R D Scorporate social responsibility (CSR), employee treatment, human capital, patents and citations, technological innovation

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Employee treatment and firm innovation

Mao

Weathers

2019

Business Fin & Account

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“…This undoubtedly reduces a company's risk of facing financial penalties and lawsuits. In practice, companies with better social ratings are expected to have less financial risk than companies with poor social ratings (Benlemlih and Girerd-Potin [99]; Chang et al [100]). …”

Section: Multiple Regressionmentioning

confidence: 99%

Does Institutional Context Affect CSR Disclosure? A Study on Eurostoxx 50

2018

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Abstract:We propose to investigate the relationship between corporate social responsibility disclosure and institutional/environmental factors among a sample of European listed companies. We find that, by using several traditional explicative variables, institutional factors affect the level of CSR disclosure, in a context where the EU Commission has been paying growing attention to social and environmental accountability of listed companies (see the EU Dir. 95/2014). Our findings are further supported by multivariate regression, where ESG score (measure of CSR disclosure) is regressed on nine variables which represent the expression of institutional factors. By looking at the institutional determinants of CSR disclosure, we are seeking to pose a challenge for future research agenda, in order to understand whether CSR does actually reflect an effective commitment of firms to accounting practices and rules, as a form of social behavior, or whether it is just a tool to manage stakeholders' perception and to comply with regulation.

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“…With the increase in CSR information disclosure, the agency problem between managers and shareholders is reduced, and the ability of shareholders to supervise managers increases, so the willingness of managers to reduce risk also decreases. Therefore, increased CSR information disclosure improves the information environment and the quality of accounting information [31][32][33][34][35], thereby reducing information asymmetries between managers and shareholders [36]. A better information environment should lead to enhanced and expedited decision making and a greater capacity for innovation.…”

Section: The Information Effect Of Csr Information Disclosurementioning

confidence: 99%

Corporate Social Responsibility Information Disclosure and Innovation Sustainability: Evidence from China

Zhang

2020

Sustainability

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We selected the Chinese A-share listed companies during period of 2007 to 2017 as the research subject, and from the perspective of information and reputation effects, we examined the relationship between corporate social responsibility (CSR) information disclosure and innovation sustainability. The results show that CSR information disclosure has a significant positive relationship with innovation sustainability. Analysis of the effects channel suggests that the information effect plays a dominant role; CSR information disclosure can alleviate the information asymmetry between managers and investors, controlling shareholders and minority shareholders, and alleviate the financing constraint problems, thereby improving innovation sustainability. Our findings support the information hypothesis but not the reputation hypothesis. The relationship between CSR information disclosure and innovation sustainability is more significant in non-state-owned companies. The moderating effect shows that managerial stock incentives can strengthen the positive relationship between CSR information disclosure and innovation sustainability. A series of robustness test results show that the conclusions are reliable. The research is important for promoting the fulfillment of CSR, improving corporate innovation, and promoting the healthy development of the capital market.

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Corporate social responsibility and firm financial risk reduction: On the moderating role of the legal environment

Cited by 139 publications

References 90 publications

Employee treatment and firm innovation

Employee treatment and firm innovation

Does Institutional Context Affect CSR Disclosure? A Study on Eurostoxx 50

Corporate Social Responsibility Information Disclosure and Innovation Sustainability: Evidence from China

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