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The relationship between corporate governance and community engagement: Evidence from the Australian mining companies

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  • Lin, Philip T.
  • Li, Bin
  • Bu, Danlu

Abstract

We investigate whether effective corporate governance mechanisms help improve firm-level community engagement activities, using a sample of Australian mining companies for the period 2005–2013. We firstly document that effective board structure and functionality positively contribute to mining companies׳ community engagement. Secondly, we analyze the components of community engagement and examine each of them individually with governance mechanisms. The results show that the effects on engagement with indigenous people and indirect economic are mostly significant and profound. Thirdly, we hypothesize that firm performance proxied by dividend yield can moderate the relationship between governance mechanisms and community engagement. Our empirical results support this hypothesis, suggesting that dividend yield mitigates the negative effects of the largest shareholders ownership and strengthens the positive effects of board size, board meeting and the presence of CSR committee on community engagement level.

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  • Lin, Philip T. & Li, Bin & Bu, Danlu, 2015. "The relationship between corporate governance and community engagement: Evidence from the Australian mining companies," Resources Policy, Elsevier, vol. 43(C), pages 28-39.
    • Handle: RePEc:eee:jrpoli:v:43:y:2015:i:c:p:28-39
    DOI: 10.1016/j.resourpol.2014.11.004
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    More about this item

    Keywords

    Corporate governance; Community engagement; Australian mining companies;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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