Do venture capital firms promote corporate social responsibility?

Jiujin, Li; Chang, Xu; Fung, Hung‐Gay; Chan, Kam C.

doi:10.1016/j.iref.2020.10.012

Cited by 25 publications

(25 citation statements)

References 49 publications

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“…CSR companies are known as less risky (Verwijmeren and Derwall 2010;Yeh et al 2020); therefore, their leverage can be higher. In relation to agency costs theory, CSR in itself lowers information asymmetry and agency costs (Cheng et al 2014;Li et al 2021). However, if managers of CSR companies make inefficient CSR overinvestments merely to attract attention to themselves, this will adversely affect agency costs (Barnea and Rubin 2006;Yeh et al 2020).…”

Section: Discussionmentioning

confidence: 99%

“…If CSR reduces information asymmetry and agency costs, that can raise investor trust and so reduce the influence of financial constraints (Cheng et al 2014;Li et al 2021). Therefore, we can consider CSR as a capital structure determinant connected to both the agency costs, and to the life cycle theories.…”

Section: Csr-oriented Studies In the Context Of Capital Strcuture The...mentioning

confidence: 99%

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Capital Structure and Its Determinants—A Comparison of European Top-Rated CSR and Other Companies

Krištofík

Medzihorský

Musa

2022

JRFM

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Corporate social responsibility (CSR), ethics, and sustainability have become an inseparable part of the discourse of modern business. Applying linear regression and comparison of intervals of beta-coefficients, we focused on the mediating role of CSR in the relations between capital structure and its determinants. Examining the sample of European large caps, we observed that CSR companies are significantly more leveraged than non-CSR ones. The influence of the corporate income tax rate and depreciation and amortization on leverage does not differ significantly between CSR and non-CSR companies. Moreover, tax shields seem to be insignificant for both CSR and non-CSR companies. However, we should stress that, for depreciation and amortization, the beta coefficient has a different significance in the model of CSR companies, compared to the model of non-CSR companies. Also, the difference between the models regarding the relations of leverage and asset tangibility is worth noting. Non-CSR companies with a higher proportion of fixed assets have lower leverage. This result was not confirmed for CSR companies. The hypothesis that CSR replaces the role of collateral cannot be confirmed. Available cash influences leverage negatively in both models, supporting the pecking-order theory. This result is much stronger for non-CSR companies compared to CSR ones. This study found fewer statistically significant differences between CSR and non-CSR companies regarding capital structure determinants than were expected.

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Section: Discussionmentioning

confidence: 99%

Section: Csr-oriented Studies In the Context Of Capital Strcuture The...mentioning

confidence: 99%

Capital Structure and Its Determinants—A Comparison of European Top-Rated CSR and Other Companies

Krištofík

Medzihorský

Musa

2022

JRFM

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“…The cost of raising such capital is also much higher than the average interest rate on bank loans. In exchange for accepting high risk, investors usually, expect a few dozen percent shares in the profits of start-ups [58][59][60][61][62][63][64][65][66][67][68].…”

Section: Determinants Of Existence and Development Of Start-upsmentioning

confidence: 99%

The Influence of Local Economic Conditions on Start-Ups and Local Open Innovation System

Jonek-Kowalska

Wolniak

2021

Journal of Open Innovation: Technology, Market, and Complexity

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The development of start-ups is a driving force of the local and regional economy. Therefore, it should be in the interest of municipal authorities to take actions for their organizational and resource support. In the conditions of limited public resources, however, it is a difficult and multifaceted task. Therefore, in this article, the authors attempt to determine the influence of local conditions on the establishment of start-ups. As a natural environment for the development of this type of entrepreneurship, cities were considered in which accessibility to infrastructure and human resources is high, and thus, by definition, conducive to creativity and innovation. Such a formulations of the objective and scope of the research allowed the existing theoretical and research gaps to be filled, relating to the identification and establishment of a hierarchy of local determinants of creating start-ups in the urban environment. The research in question was carried out on a representative sample of 287 Polish cities using questionnaire techniques and structural modelling. The results confirm the dominant influence of human and financial capital on the establishment of start-ups. The research also shows a slightly less significant influence of business incubators and technology parks on the creation of start-ups, which implies the need to improve the performance of these entities. The results also point to the positive role of direct city involvement in the development of this form of entrepreneurship.

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“…VC participates in corporate governance activities in the form of financial investment and provides value-added services (financial financing and professional guidance) to enterprises [33][34][35]37,59,60]. The ultimate goal is to exit through stock market listing, merger, and acquisition or other equity transfer methods after the enterprise value increases and to earn excess investment returns [38,40,61].…”

Section: Csr Vc and Firm Innovationmentioning

confidence: 99%

“…Therefore, it is worth further study whether CSR on innovation will be affected after VC participation. Many scholars believe that VC can provide financial financing and professional guidance by participating in corporate governance activities, empower enterprises with information advantages and enhance enterprises' creativity and insight [33][34][35][36][37]. However, some scholars have proposed that VC may produce the grasping effect that will weaken the innovation ability of the firm, which is easy to induce short-sighted behavior, agency conflict, and moral hazard [38][39][40].…”

Section: Introductionmentioning

confidence: 99%

The Effect of Corporate Social Responsibility on the Technology Innovation of High-Growth Business Organizations

et al. 2021

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The implementation of innovation-driven strategy requires business organizations to actively conduct technological innovation activities. Corporate social responsibility (CSR) performance is an important factor to promote technological innovation, and venture capital (VC) as a matching capital with technological innovation also affects technological innovation. Using Chinese listed companies on the Growth Enterprise Market (GEM) during the 2014–2018 period as a sample, we study the role of corporate social responsibility performance in technological innovation and the impact of venture capital on the relationship between the two. We find that social responsibility performance can effectively promote innovation, which is promoted significantly by the shareholder responsibility and employee responsibility dimensions of social responsibility. We also find that venture capital inhibits the promotion of social responsibility to technological innovation. This work will guide VC institutions to pay more attention to business organizations social innovation projects.

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Do venture capital firms promote corporate social responsibility?

Cited by 25 publications

References 49 publications

Capital Structure and Its Determinants—A Comparison of European Top-Rated CSR and Other Companies

Capital Structure and Its Determinants—A Comparison of European Top-Rated CSR and Other Companies

The Influence of Local Economic Conditions on Start-Ups and Local Open Innovation System

The Effect of Corporate Social Responsibility on the Technology Innovation of High-Growth Business Organizations

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