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Hao Liang, Luc Renneboog On the Foundations of Corporate Social Responsibility (01 Aug 2016) Available at ECGI: http://ecgi.global/working-paper/foundations-corporate-social-responsibility
A firm's corporate social responsibility (CSR) practice and its country's legal origin are strongly correlated. This relation is valid for various CSR ratings coming from several large datasets that comprise more than 23,000 large companies from 114 countries.
We find that CSR is more strongly and consistently related to legal origins than to "doing good by doing well"-factors, and most firm and country characteristics such as ownership concentration, political institutions, and degree of globalization. In particular, companies from common law countries have lower level of CSR than companies from civil law countries, and Scandinavian civil law firms assume highest level of CSR. This link between legal origins and CSR seems to be explained by differences in ex post shareholder litigation risk as well as in stakeholder regulations and state involvement in the economy. Evidence from quasi-natural experiments such as scandals and natural disasters suggest that civil law firms are more responsive to CSR shocks than common law firms, and such responsiveness is not likely driven by declining market shares following the shock.
Corporations play a crucial role in achieving a sustainable world. In achieving corporate sustainability, the current regulatory frameworks generally emphasize the role of the corporate board. However, today’s media suggest that institutional...Read more
Most investors have a single goal: to earn the highest financial return. These socially-neutral investors maximize their risk-adjusted returns and would not accept a lower financial return from an investment that also produced social benefits. An...Read more
This paper documents important shifts in occupational composition following merger and acquisition (M&A) activity as well as increases in median wages and wage inequality. We propose M&As act as a catalyst for skill-biased and routine-...Read more
We examine an extensive matched sample of U.S. dual and single class firms in 1980-2015 from the time of their IPO, and document that the valuation difference between dual and single class firms varies along their life cycle. On average, at the...Read more