Peer Effects of Corporate Social Responsibility

Cao, Jie; Liang, Hao; Zhan, Xintong

doi:10.2139/ssrn.2831834

Cited by 44 publications

(57 citation statements)

References 23 publications

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“…Namely, if CSR creates a competitive advantage (for instance, reputational), when one company engages in responsible business practices, its competitors may follow suit. Consistent with this idea, Cao et al (2018) find evidence of significant peer effects in CSR. Using a regression discontinuity design based on CSR shareholder proposals that pass or fail by a small margin of votes, they find that peers of firms that pass such proposals experience lower announcement returns and higher CSR scores in the following year than peers of firms that marginally reject similar proposals.…”

Section: The Roles Of Shareholders and Other Stakeholders In Buildingmentioning

confidence: 54%

“…They find that, in the small and rural markets of their sample, just three dimensions-commitment to the community, community support, and sense of community-account for 43 per cent of the variation in family business operators' CSR. Cao et al (2018), building on Freeman's (2018) finding that common ownership between customers and suppliers increases the longevity of their relationships as well as the innovative and financial cooperation between the firms, find that common owner ship and common board membership in both the customer and supplier facil itate the propagation of CSR practices from customer to supplier. If common ownership between vertically related firms has an impact on their CSR behaviour, common ownership between horizontally related firms (that is, competitors) is also likely to matter, as argued by Serafeim (2018).…”

Section: The Roles Of Shareholders and Other Stakeholders In Buildingmentioning

confidence: 99%

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The impact of ownership on building sustainable and responsible businesses

Villalonga¹

2018

JBA

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This article reviews what we know and do not know about the impact of ownership on building sustainable and responsible businesses. It begins by analysing why firm owners are an important driver of responsible business behaviour, and reviews whether such behaviour comes at a financial cost to owners or not. It then discusses how owners drive responsible business behaviour as compared to other stakeholders, reviewing the empirical evidence about the impact of different owner types on various forms of responsible business.My review shows that there is a fair amount of research about certain topics, such as the relation betweeen financial and social performance and about the social and enviromental impact behaviour of the two most prevalent types of owners of public corporations-families and institutional investors-although the cumulative evidence on those topics is far from conclusive. Moreover, there are also a number of gaps in our knowledge that warrant further research to inform recommendations to business leaders and policy makers. These include the relative effectiveness of different types of owners, stakeholders, and organisational forms at building sustainable and responsible businesses; the impact of the recent evolution of capital markets on CSR behaviour; and the social snd enviromental impact of the state, foundations, and employees as owners of corporations. EXECUTIVE SUMMARYEquity ownership of corporations is a critical factor in building sustainable and responsible businesses. The paper sets out to review previous studies of this relationship and adopts a multidisciplinary approach to identify gaps in the understanding of how ownership has an impact on business practices and policies.

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Section: The Roles Of Shareholders and Other Stakeholders In Buildingmentioning

confidence: 54%

Section: The Roles Of Shareholders and Other Stakeholders In Buildingmentioning

confidence: 99%

The impact of ownership on building sustainable and responsible businesses

Villalonga¹

2018

JBA

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“…Similar arguments on peer effects are made for other corporate policies such as capital structure (Leary and Roberts, 2014), corporate financial policies (Ferrell, Liang, and Renneboog, 2016), corporate social responsibility (Cao, Liang, and Zhan, 2016;Liang and Renneboog, 2016), and corporate culture (Fiordelisi, Li, Stentella-Lopes, and Ricci, 2016). We take the withinsample mean of the lagged employee salaries and benefits expenses (as obtained from Worldscope) for the focal company's peer firms by industry and by year (industry-year average) as the IV.…”

Section: Instrumental Variable Approachmentioning

confidence: 68%

Corporate Employee-Engagement and Merger Outcomes

Liang

Renneboog²,

Vansteenkiste³

2017

SSRN Journal

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Extending the theories of employee incentives and inalienability of human capital, we investigate the link between a firm's engagement in employee issues and the returns to shareholders around mergers and acquisitions (M&As) and analyze an international sample of 4,565 M&A deals from 48 countries. We find that stronger employee-engagement-especially in terms of monetary benefits-by the acquiring firm is positively related to shareholder returns in domestic deals, but this positive effect is attenuated in cross-border deals, whereas workforce diversity, training and development, or health and safety do not affect shareholder value. The attenuating effect of cross-border deals is stronger when uncertainty about post-merger labor integration is higher and when economic nationalism in the target's country is stronger, consistent with an explanation based on the inalienability of human capital and employment policies. Moreover, we find that most effects of employee-engagement on shareholder returns are driven by the acquirer rather than the target, and that they persist in the long run post-merger.

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“…Whereas a firm's expenses in terms of wages and benefits are influenced by the wage expenses by its industry peers (satisfying the relevance requirement of instrumental variables), it is unlikely that these expenses by industry peers affect the firm's announcement returns directly or through channels other than the focal firm's employment policies, thus satisfying the exclusion condition. 17 Similar arguments on peer effects are made for other corporate policies such as capital structure (Leary and Roberts, 2014), corporate financial policies (Ferrell, Liang, and Renneboog, 2016), corporate social responsibility (Cao, Liang, and Zhan, 2016;Liang and Renneboog, 2016), and corporate culture (Fiordelisi, Li, Stentella-Lopes, and Ricci, 2016). We take the within-sample mean of the lagged employee salaries and benefits 17 One potential concern is that the firm's employment quality and its peer firms' wages and benefits expenses are affected by transitory political or economic situations (e.g.…”

Section: Iv5 Instrumental Variable Approachmentioning

confidence: 85%

Cross-Border Acquisitions and Employee-Engagement

2017

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We provide novel evidence that a firm's engagement in employee-related issues explains part of the value difference between its domestic and cross-border takeovers. An acquirer's investment in employee relations is positively related to the firm's performance when acquiring domestically, but labor-related frictions reverse this effect when acquiring a foreign target. The results cannot be explained by country-level labor regulation but are consistent with the notion that labor-related frictions exist that prohibit firms from efficiently transforming monetary incentives in higher shareholder value when acquiring a foreign target firm. hereby states that he has not been subject to any type of conflicts of interest when performing this research, and that he hey did not receive any financial or in-kind support from nonuniversity sources.Luc Renneboog hereby states that he has not been subject to any type of conflicts of interest when performing this research, and that he hey did not receive any financial or in-kind support from nonuniversity sources.Cara Vansteenkiste hereby states that she has not been subject to any type of conflicts of interest when performing this research, and that she hey did not receive any financial or in-kind support from non-university sources.2 Cross-Border Acquisitions and Employee-Engagement I.

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Peer Effects of Corporate Social Responsibility

Cited by 44 publications

References 23 publications

The impact of ownership on building sustainable and responsible businesses

The impact of ownership on building sustainable and responsible businesses

Corporate Employee-Engagement and Merger Outcomes

Cross-Border Acquisitions and Employee-Engagement

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