Corporate Social Responsibility and Investment Efficiency

Benlemlih, Mohammed; Bitar, Mohammad

doi:10.2139/ssrn.2566891

Cited by 7 publications

(10 citation statements)

References 38 publications

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“…Our results also corroborate findings of prior studies showing a higher financial reporting quality of family-controlled businesses due to interest alignment between shareholders and management (Cascino et al, 2010). Therefore, Hypothesis 1 is supported, and these results are in line with the previous studies (Benlemlih & Bitar, 2016;Bhandari & Javakhadze, 2017;Cook et al, 2016;Samet & Jarboui, 2017). Regarding other control variables, our results report significant differences of firm size, firm age, presence of loss, audit quality, Z-score, tangibility and standard deviation of cash flow from operation to sales.…”

Section: Resultssupporting

confidence: 92%

“…Our findings show the positive impact of financial reporting quality on investment efficiency (Biddle et al, 2009). These results are in line with the findings of Benlemlih and Bitar (2016). Moreover, we find that a negative relationship exists between the presence of loss and investment efficiency.…”

Section: Multivariate Analysissupporting

confidence: 92%

“…The contribution of this study can be summarized as the following: we extend the recent literature on the relationship between CSR performance and investment efficiency (Benlemlih & Bitar, 2016;Bhandari & Javakhadze, 2017;Cook, Romi, Sanchez, & Sanchez, 2016;Samet & Jarboui, 2017) by introducing family control as a moderating variable in this context. The extant literature claims that CSR performance has important economic implications for firm-level investment.…”

mentioning

confidence: 99%

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Does family control explain why corporate social responsibility affects investment efficiency?

Shahzad

Rehman²,

Nawaz

et al. 2018

Corp Soc Responsibility Env

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Drawing on stakeholder and socioemotional wealth theories, we empirically examine the influence of corporate social responsibility performance on investment efficiency in family-controlled businesses versus non-family-controlled businesses. Our panel dataset consists of 190 Pakistani firms listed on the Pakistan Stock Exchange over the period of 2007-2016. We use feasible generalized least square regression for model estimation. Our results suggest that firms with higher corporate social responsibility performance invest efficiently compared with firms with lower corporate social responsibility performance. Furthermore, the impact of corporate social responsibility performance on investment efficiency is higher in the family firms. The results suggest that family-controlled businesses are more willing to engage in social responsibility activities to achieve their non-economic goals, i.e. family image and trans-generational control. Overall, our results indicate that corporate social responsibility is beneficial for the organization, and its implication is more fruitful in the context of family-controlled businesses.

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Section: Resultssupporting

confidence: 92%

Section: Multivariate Analysissupporting

confidence: 92%

mentioning

confidence: 99%

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Does family control explain why corporate social responsibility affects investment efficiency?

Shahzad

Rehman²,

Nawaz

et al. 2018

Corp Soc Responsibility Env

View full text Add to dashboard Cite

show abstract

“…We address the problem of endogeneity by using an instrumental variable technique in which an instrument is used to extract the exogenous component of CSR. Following previous studies, we use the industry–year average of CSR (CSR_IND) as an instrumental variable (Benlemlih & Bitar, ; Samet & Jarboui, ). In the first stage, we regress CSR on the instrument and all control variables.…”

Section: Resultsmentioning

confidence: 99%

Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management

Naseem

Shahzad

Asim

et al. 2019

Corp Soc Responsibility Env

111

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We examine a channel through which corporate social responsibly affects firm performance. More specifically, we modeled the mediating role of enterprise risk management between corporate social responsibility and firm performance. We use the weighted average of environmental, social, and governance scores (as a proxy of corporate social responsibility) extracted from DataStream of Thomson Reuters‐ASSET4. Drawing on the stakeholder theory and using a large sample of 1021 Asia Pacific firms throughout 2006–2016, we show that corporate social responsibly is positively associated with firm performance. Our results suggest that corporate social responsibly is linked to enterprise risk management. However, the effect of corporate social responsibly on firm performance is both direct and indirect. We provide evidence that enterprise risk management partially mediates the relationship between corporate social responsibility and firm performance. We account for the issue of endogeneity and use alternative measures of firm performance for a robustness check. The findings offer important implications of socially responsible business processes through leveraging on the significance of enterprise risk management.

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“…This might be due to the low coverage of firms by MSCI ESG as previous literature highlights. Indeed, prior studies also find no significant relationship between such variables and firm financial performance variables (Benlemlih & Bitar, ; El Ghoul, Guedhami, Kwok, & Mishra, ).…”

Section: Strength and Concern Components Of Cermentioning

confidence: 93%

Corporate environmental performance and financing decisions

Benlemlih

Cai

2019

Business Ethics: A Eur Rev

Self Cite

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We investigate the financing strategies of environmentally responsible firms to understand how they set target capital structures and make incremental financing decisions. Literature shows that firms with better environmental performance have lower risk and better access to financing. However, it is not obvious how these firms choose to finance their investments. Using an extensive data set of U.S. firms, we find that firms with superior environmental performance have significantly lower debt ratios and use mostly short‐term debt for temporary financing needs. In doing so, environmentally responsible firms are able to achieve more tax savings and experience lower costs of financial distress. Our results provide new empirical facts about environmental performance and financing decisions, and they help explain the observed relationship between environmental performance and economic performance.

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Corporate Social Responsibility and Investment Efficiency

Cited by 7 publications

References 38 publications

Does family control explain why corporate social responsibility affects investment efficiency?

Does family control explain why corporate social responsibility affects investment efficiency?

Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management

Corporate environmental performance and financing decisions

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