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Is corporate social responsibility a value-increasing investment? Evidence from antitakeover provisions

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  • Sheikh, Shahbaz

Abstract

This study empirically tests whether corporate social responsibility (CSR) is a value-increasing investment by estimating the effect of antitakeover provisions on CSR. Results indicate that managerial entrenchment measured by the G-index of antitakeover provisions is negatively associated with CSR. However, this negative effect is driven by CSR strengths; G-index has no significant effect on CSR concerns. Overall, this study supports the stakeholder theory of CSR by showing that CSR is a value-increasing strategic investment, as entrenched managers tend to reduce CSR instead of overinvesting in it.

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  • Sheikh, Shahbaz, 2018. "Is corporate social responsibility a value-increasing investment? Evidence from antitakeover provisions," Global Finance Journal, Elsevier, vol. 38(C), pages 1-12.
    • Handle: RePEc:eee:glofin:v:38:y:2018:i:c:p:1-12
    DOI: 10.1016/j.gfj.2017.08.002
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    Cited by:

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    2. Sammy G. Muriithi & Bruce A. Walters & William R. McCumber & Luis R. Robles, 2022. "Managerial entrenchment and corporate social responsibility engagement: the role of economic policy uncertainty," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(2), pages 621-640, June.
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    6. Omer Unsal & Blake Rayfield, 2020. "Correction to: Corporate governance and employee treatment: Evidence from takeover defenses," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(2), pages 392-416, April.

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    More about this item

    Keywords

    CSR; Antitakeover provisions; Managerial entrenchment; Firm value;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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