Stakeholder Orientation and Firm Value

Stakeholder Orientation and the Cost of Debt: Evidence from State-Level Adoption of Constituency Statutes

“…The permutation p-value is then calculated as the proportion of the re-randomizations for which the coefficient estimate (t-statistic) is more extreme in absolute value than that from the regression of interest. 20 The eight papers are Geczy et al (2015), Flammer andKacperczyk (2016), Flammer (2018), Radhakrishnan, Wang, and Wang (2018), Cremers, Guernsey, and Sepe (2019), Flammer, Hong, and Minor (2019, Leung et al (2019), and Nguyen, Kecskés, and Mansi (2020). firms incorporated in states without such statutes.…”

Stakeholder orientation and corporate payout policy: Insights from state legal shocks

“…The main independent variable is CS, an indicator variable equal to one if a firm's state of incorporation has adopted a constituency statute, and zero otherwise. In column (1) we exclude firms incorporated in states where the scope of directors' discretion is expended only in the takeover context of change-ofcontrol situations (e.g., Cremers et al, 2019). In column (2) we treat the statute-enactment year as transition years and exclude observations in these years.…”

“…Ni (2020) finds that greater stakeholder orientation significantly reduces discretionary accruals, while the improved financial reporting quality can be a channel through which stakeholder orientation increases shareholder value. Two other contemporary studies by Bettinazzi and Zollo (2017) and Cremers et al (2019) find support for a positive relationship between stakeholder orientation and shareholder value.…”

“…In Panel A, we base our tests on alternative subgroups and sample periods. Cremers et al (2019) indicate that 9 out of 35 enacting states of constituency statutes expand the scope of directors' discretion only in the takeover context or change-ofcontrol situations. 11 To address the issue that the decline in share repurchases is merely driven by the takeover-provision effect of constituency statutes, we exclude firms incorporated in these states and report results in column (1).…”

Stakeholder Orientation and Bank Payout Policy: Evidence from US Constituency Statutes

“…First, we extend the literature on stakeholderism by adding to the limited evidence base regarding how stakeholder orientation impacts bank behaviour. Prior evidence suggests that stakeholder orientation is an important determinant of non‐financials': firm value (Cremers, Guernsey and Sepe, 2019); innovation (Flammer and Kacperczyk, 2016); cost of debt (Gao, Li and Ma, 2020); stock price crash risk (Li and Zhang, 2020); cash holdings (Chowdhury, Doukas and Park, 2021); earnings management (Radhakrishnan, Wang and Wang, 2018; Ni, 2020); tax planning (Cumming et al , 2021) and payout policy (Ni, Song and Yao, 2020). For the banking industry, Leung, Song and Chen (2019) present evidence that the adoption of stakeholder constituency statutes reduces risk‐taking and improves financial stability.…”