Corporate social responsibility and firm leverage: The impact of market competition

Sheikh, Shahbaz A

doi:10.1016/j.ribaf.2018.11.002

Cited by 62 publications

(49 citation statements)

References 55 publications

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“…The closest relation was with the ROE (albeit only 13.80%), where the information of only four CSR variables was related to that ratio. Although some CSR variables positively affected financial behaviour, which agrees with several studies (Cherian et al, 2019;Chon, 2019;Isanzu & Xu, 2016) that found a positive relation with ROE, other CSR variables negatively affected it, which coincides with other studies (Sheikh, 2019) that negatively related CSR and firm leverage. To find such evidence, it may be necessary to increase the sample size.…”

Section: Discussionsupporting

confidence: 91%

“…Therefore, several studies that have used financial indicators like ROE and ROA to measure economic–financial performance found a positive relation between this performance and CSR. However, the results are more divergent when other financial indicators are used; for example, other studies (Sheikh, ) have found a negative relation between CSR and firm leverage, but it depends on market competition. Specifically, CSR has a negative effect on firm leverage but only when competition in product markets is high because when competition is not fierce, CSR has no impact on firm leverage.…”

Section: Background and Research Hyphotesismentioning

confidence: 92%

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The impact of corporate social responsibility transparency on the financial performance, brand value, and sustainability level of IT companies

González

Poza

Olmeda

2019

Corp Soc Responsibility Env

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The companies are aware of the impact that disseminating their corporate social responsibility (CSR) performance has on how shareholders or investors perceive them. This work analyses if disseminating CSR results affects their economic–financial results, their scores in open‐access sustainability ranking, their brand values, and also the credit ratings that agencies S&P and Moody's confer them. For this purpose, the only 13 companies of the IT sector occupying a top 100 brand rankings position were selected. The results reveal that large companies come over as being more transparent in terms of sustainability, but this transparency is not related to their financial behaviour. Brand rankings collect socio‐economic and environmental information, but only the transparency in social and environmental aspects explains the public‐access CRS rankings. Finally, the results also show that this transparency affects credit ratings.

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Section: Discussionsupporting

confidence: 91%

Section: Background and Research Hyphotesismentioning

confidence: 92%

The impact of corporate social responsibility transparency on the financial performance, brand value, and sustainability level of IT companies

González

Poza

Olmeda

2019

Corp Soc Responsibility Env

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“…Implementing voluntary initiatives for businesses to improve their employees' labor conditions and implementing socially significant projects creates a particular environmental protection sphere. Application of these practices on corporate responsibility in developing markets are found in the following readings: Benlemlih (2019) , Borges et al (2018) , Cheong et al (2017) , Denisov et al (2018) , Ge and Zhao (2017) , Gong and Ho (2018) , Han and Zheng (2016) , Krivtsov (2014) , Lee et al (2018) , Li and Liu (2018) , Malik and Kanwal (2018) , Marquis et al (2017) , Morozova et al (2018) , Mukherjee et al (2018) , Nazri et al (2018) , Popkova (2017) , Schrempf-Stirling (2018) , and Veselovsky et al (2018) , Chu et al (2018) , Frig et al (2018) , Harjoto and Laksmana (2018)) , Kansal et al (2018) , Sheikh (2019) , Utgård (2018) .…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries

Popkova

DeLo

Sergi

2021

Research in International Business and Finance

101

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This paper compares today’s corporate management in developing markets (BRICS countries) vs. developed markets (the OECD countries). The influence of determining a new social corporate management season considering social distancing amid the COVID-19 pandemic on emerging markets' economic growth is ascertained and set apart from corporate management in developing markets. This paper helps clarifying and better understanding the role of corporate social responsibility in the conditions of an economic crisis against the background of the COVID-19 pandemic. This work provides scientific arguments that allow solving critical discussions regarding the advantages (growth of quality of life, an increase of business's competitiveness) and costs (limitation of economic growth, non-commercial use of profit, and increased price for goods and services) of domestic production and consumption. In the long-term, responsible financial practices return all investments and allow countries to better cope with a crisis. The research supplies a new view of corporate social responsibility as a measure of crisis management. It reflects its advantages at a time of social distancing in the conditions of the COVID-19 pandemic. The institutionalization of corporate social responsibility in emerging countries is not predetermined by internal factors (approach to doing business or organizational culture), if not by external factors (market status, state regulation, and consumer awareness). These circumstances prove the high complexity of strengthening corporate social responsibility in developing countries. In the conditions of social distancing – due to the COVID-19 pandemic – corporate social responsibility goes to a new level. In both developing and developed countries, one of the most widespread manifestations of corporate social responsibility is the entrepreneurship's transition to the remote form of activities. This envisages the provision of remote employment for workers and the online purchase of goods and services for consumers.

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“…For our purpose, endogeneity could rise by both reverse causalities (EATR–CSR) and by the correlation between the independent variables and error term. In order to avoid endogeneity problems, we employ the instrumental variables (IV; Ferrel et al, ) generalized method of moments (GMM; Sheikh, ; Sheikh, ; Zolotoy, O'Sullivan, & Chen, ) technique with year, industry‐fixed effect, and cluster at the firm level (Ferrel et al, ; Zolotoy et al, ). One of the reasons we adopt the IV–GMM is that by running the IV–GMM, the model parameters are estimated in a single step, improving the estimation efficiency (e.g., Cameron & Trivedi, ), whereas in the classic IV 2sls, this does not happen.…”

Section: Methodsmentioning

confidence: 99%

“…For our purpose, endogeneity could rise by both reverse causalities (EATR-CSR) and by the correlation between the independent variables and error term. In order to avoid endogeneity problems, we employ the instrumental variables (IV;Ferrel et al, 2016) generalized method of moments (GMM;Sheikh, 2018;Sheikh, 2019; Zolotoy, O'Sullivan, & Chen, 2019) technique with year, industry-fixed effect,…”

mentioning

confidence: 99%

Do income taxes affect corporate social responsibility? Evidence from European‐listed companies

Gandullia

Piserà

2019

Corp Soc Responsibility Env

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This study explores empirically the effects of corporate income taxes on the incentive to invest in corporate social responsibility (CSR) activities. We estimate the relation between CSR ratings and firm‐specific corporate effective tax rates for a large sample of nonfinancial‐listed companies from 15 European countries during 2006–2016. By employing an instrumental variable approach, we find that average effective tax rates are negatively correlated with CSR ratings. Our findings are also consistent under additional tests and robustness checks. We, therefore, can provide suggestive evidence that corporate taxation discourages corporate socially responsible behaviour. At the same time, in a tax policy perspective, our analysis suggests how countries could encourage through the tax system the corporate provision of sustainable investments.

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Corporate social responsibility and firm leverage: The impact of market competition

Cited by 62 publications

References 55 publications

The impact of corporate social responsibility transparency on the financial performance, brand value, and sustainability level of IT companies

The impact of corporate social responsibility transparency on the financial performance, brand value, and sustainability level of IT companies

Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries

Do income taxes affect corporate social responsibility? Evidence from European‐listed companies

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