Does managerial ownership influence corporate social responsibility (CSR)? The role of economic policy uncertainty

Viput Ongsakul, Pornsit Jiraporn, Sirimon Treepongkaruna

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)763-779
Number of pages17
JournalAccounting and Finance
Volume61
Issue number1
DOIs
StatePublished - Mar 2021

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)

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