CEO inside debt and corporate social responsibility

Abstract

PurposeThe purpose of this paper is to empirically examine the relation between incentives from CEO inside debt (deferred compensation and pension benefits) and corporate social responsibility (CSR).Design/methodology/approachInstrumental variable (IV-GMM) regressions are used to estimate the relation between CEO inside debt and CSR.FindingsThe results of this paper indicate that CEOs with large inside debt tend to invest more in CSR. Analysis of CSR strengths and concerns supports this finding and shows that CEO inside debt is significantly positively (negatively) associated with CSR strengths (concerns). Further tests indicate that CEO inside debt exerts a positive and significant effect on all five dimensions of social performance (diversity, community, product, employee relations and environment).Research limitations/implicationsThe results of this study are based on US corporations. Future research should investigate if these results hold for firms in other countries in order to better our understanding of the relation between CEO inside debt and CSR.Practical implicationsCEOs use CSR as a risk management strategy to reduce corporate risk in order to protect the value of their inside debt.Social implicationsThe results in this paper provide a practical tool to boards of corporations to increase investment in CSR. The results suggest that boards can encourage CEOs to invest in CSR by increasing incentives from inside debt.Originality/valueThis study contributes to the literature that examines the relation between inside debt and CSR by showing that CEO inside debt exerts a positive impact on CSR.

Board gender diversity and corporate social responsibility assurance: The moderating effect of ownership concentration

“…Moreover, a better CSR assurance performance could influence board gender diversity, thus, reverse causality. To account for potential endogeneity, the paper followed prior studies (Foster, 1997; Sheikh, 2020) by using IVPROBIT regression method. FDoB is treated as endogenous.…”

“…Moreover, a better CSR assurance performance could influence board gender diversity, thus, reverse causality. To account for potential endogeneity, the paper followed prior studies(Foster, 1997;Sheikh, 2020) by usingT A B L E 1 Descriptive statistics tableNote: This table reports the summary statistics for the dependent as well as key governance and control variables used in the empirical analysis. Variable definitions are provided in Table…”

Effects of CEO Overseas Experience on Corporate Social Responsibility: Evidence from Chinese Manufacturing Listed Companies

“…However, CSR is an essential component of corporate strategic decision making, and CEO background characteristics will inevitably have a significant impact on CSR fulfillment. In this context, existing studies focus on the CEO's characteristics, identity, and organizationalrelated attributes: first, the relationship between individual characteristics and CSR, mainly including factors such as the CEO's moral leadership [19][20][21], transformational leadership [22], gender [23], education level [24,25], ability [26], overconfidence [27], narcissism and hubris [28][29][30][31], responsible leadership styles [32], entrepreneurial orientation [33], greed [34], luck [35]; second, the relationship between individual identity and CSR, including the CEO's power [36][37][38], family CEO [39], ownership [40], celebrity status [41], political ideologies [42], and the transgenerational transfer of entrepreneur's political appointments or identity [43]; third, the relationship between organization-related attributes and CSR, including the CEO's compensation [44,45], tenure [46,47], career horizon problems [48], duality [49][50][51], incentive mechanism [52,53], internal debt [54,55].…”

Corporate social responsibility and dividend payout policy in extraordinary time: Empirical study of South Africa

“…Alternatively it could also be argued that a high dividend payment may influence CSR, leading to a reverse causality. To address potential endogeneity issues, we followed the examples of prior studies (Buertey, 2021; Sheikh, 2020) by lagging the CSRP variable. The assumption is that a previous year's CSRP may not be correlated with the error term of the present year (Wooldridge, 2008).…”