TY - JOUR
T1 - Does managerial ownership influence corporate social responsibility (CSR)? The role of economic policy uncertainty
AU - Ongsakul, Viput
AU - Jiraporn, Pornsit
AU - Treepongkaruna, Sirimon
PY - 2021/3
Y1 - 2021/3
N2 - To explore the drivers of corporate social responsibility (CSR), we investigate how managerial ownership influences CSR in the presence of economic policy uncertainty. Our results demonstrate that, when facing more economic policy uncertainty (EPU), firms with larger managerial ownership invest significantly more in CSR. This is in agreement with the risk mitigation hypothesis, where CSR offers insurance-like protection against adverse events. When economic policy uncertainty is not considered, however, we find that managers with higher ownership stakes invest significantly less in CSR, suggesting that CSR is driven by the agency conflict. As managers own more equity, they are subject to greater costs of CSR. Additional analyses confirm the results, including dynamic GMM, propensity score matching and instrumental-variable analysis.
AB - To explore the drivers of corporate social responsibility (CSR), we investigate how managerial ownership influences CSR in the presence of economic policy uncertainty. Our results demonstrate that, when facing more economic policy uncertainty (EPU), firms with larger managerial ownership invest significantly more in CSR. This is in agreement with the risk mitigation hypothesis, where CSR offers insurance-like protection against adverse events. When economic policy uncertainty is not considered, however, we find that managers with higher ownership stakes invest significantly less in CSR, suggesting that CSR is driven by the agency conflict. As managers own more equity, they are subject to greater costs of CSR. Additional analyses confirm the results, including dynamic GMM, propensity score matching and instrumental-variable analysis.
KW - Agency theory
KW - Corporate social responsibility
KW - Economic policy uncertainty
KW - Managerial ownership
UR - http://www.scopus.com/inward/record.url?scp=85076785373&partnerID=8YFLogxK
U2 - 10.1111/acfi.12592
DO - 10.1111/acfi.12592
M3 - Article
AN - SCOPUS:85076785373
SN - 0810-5391
VL - 61
SP - 763
EP - 779
JO - Accounting and Finance
JF - Accounting and Finance
IS - 1
ER -