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

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  • Viput Ongsakul
  • Pornsit Jiraporn
  • Sirimon Treepongkaruna

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.

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  • Viput Ongsakul & Pornsit Jiraporn & Sirimon Treepongkaruna, 2021. "Does managerial ownership influence corporate social responsibility (CSR)? The role of economic policy uncertainty," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 763-779, March.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:1:p:763-779
    DOI: 10.1111/acfi.12592
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    Cited by:

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    5. Pochara Arayakarnkul & Pattanaporn Chatjuthamard & Sirimon Treepongkaruna, 2022. "Board gender diversity, corporate social commitment and sustainability," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1706-1721, September.
    6. Antonios Persakis, 2024. "The impact of climate policy uncertainty on ESG performance, carbon emission intensity and firm performance: evidence from Fortune 1000 firms," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 24031-24081, September.
    7. Anjali Kaimal & Shigufta Hena Uzma, 2024. "CSR and ownership structure: Moderating role of board characteristics in an emerging country context," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4933-4955, September.
    8. Ardianto Ardianto & Nadia Anridho & Suham Cahyono & Abu Hanifah Md. Noman Alam & Iman Harymawan, 2024. "The role of risk management committee on the relationship between corporate carbon emission disclosure and capital structure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2127-2158, May.
    9. Chang, Chong-Chuo & Chen, Hsien-Yi & Mon, Khin Thiri, 2024. "Impact of economic policy uncertainty on the firm's working capital requirements," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
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    11. Hu, May & Xiong, Wanfang & Xu, Cheng, 2021. "Analyst coverage, corporate social responsibility, and firm value: Evidence from China," Global Finance Journal, Elsevier, vol. 50(C).

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