The Influence of Corporate Social Responsibility on Investment Efficiency and Innovation

Cook, Kirsten A.; Romi, Andrea M.; Sánchez, Daniela; Sánchez, Juan M.

doi:10.2139/ssrn.2616021

Cited by 29 publications

(60 citation statements)

References 49 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: 91%

“…Their evidence is consistent with stakeholder theory and suggests that firms with CSR engagement are more likely to become transparent. Furthermore, strong CSR performance creates implicit contracts with the stakeholders and hence increases the monitoring of management (Cook et al, 2016).Overall, due to lower information asymmetry, easy availability of finance and creation of implicit contracts with the stakeholders in higher CSR firms, the problems of overand underinvestment are mitigated. One of the reasons for underinvestment by firms is that they are financially constrained.…”

Section: Csr and Investment Efficiencymentioning

confidence: 99%

“…We followed the prior literature to measure investment efficiency (Biddle et al, 2009;Cook et al, 2016;Gomariz & Ballesta, 2014;Li & Liao, 2014). We compute deviation from the optimal investment level by regressing the previous year's sales growth over the total investment cross-sectionally for each industry.…”

Section: Dependent Variable: Investment Efficiencymentioning

confidence: 99%

“…implicit contracts with the stakeholders and hence increases the monitoring of management (Cook et al, 2016;El Ghoul et al, 2011). implicit contracts with the stakeholders and hence increases the monitoring of management (Cook et al, 2016;El Ghoul et al, 2011).…”

Section: Multivariate Analysismentioning

confidence: 99%

“…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: 98%

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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: 91%

Section: Csr and Investment Efficiencymentioning

confidence: 99%

Section: Dependent Variable: Investment Efficiencymentioning

confidence: 99%

Section: Multivariate Analysismentioning

confidence: 99%

mentioning

confidence: 98%

See 3 more Smart Citations

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

The strategic choice of payment method in takeovers: The role of environmental, social and governance performance

Perego

2022

Bus Strat Env

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Payment method choice in takeovers is mainly driven by both asymmetric information between the acquirer and the target and the acquirer's financial capability. In this paper, we examine whether increased transparency and better access to finance induced by environmental, social and governance (ESG) performance are associated with the strategic choice of payment method in takeovers. More specifically, we investigate how the acquirer's and the target's ESG coverage and different levels of ESG performance affect the probability of cash offers in a sample of 836 US takeovers from 1992 to 2014. In examining the target, our results suggest that ESG coverage is positively associated with the probability of cash offers, whereas we find a negative relationship for ESG concerns and no effect for ESG strengths. Upon examining the acquirer, ESG coverage and ESG concerns both increase the probability of cash offers; however, we do not find results supporting our prediction regarding the acquirer's ESG strengths. We infer that ESG coverage and level affect strategic considerations in the choice of the payment method in takeovers because they not only reduce information asymmetry, but also enhance financing capability.

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CSR and investment efficiency in Western European countries

Khediri

2021

Corp Soc Responsibility Env

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The aim of this study is to examine: (i) whether investment efficiency is associated with CSR performance and (ii) whether this relationship varies with the strength of investor protection. Using firm level data from Western European countries, we document a positive association between CSR score and investment efficiency. We further find that the effect of CSR on investment efficiency is driven by the areas Human Ressources, Business Behavior, Corporate Governance, and Human Rights.Finally, we find that the documented association is statistically and economically more significant in countries with stronger investor protection.

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The Influence of Corporate Social Responsibility on Investment Efficiency and Innovation

Cited by 29 publications

References 49 publications

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

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

The strategic choice of payment method in takeovers: The role of environmental, social and governance performance

CSR and investment efficiency in Western European countries

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