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CSR Performance and the Value of Cash Holdings: International Evidence

Author

Listed:
  • Mohamed Arouri

    (Université Clermont Auvergne, Université d’Auvergne, EA3849, CRCGM)

  • Guillaume Pijourlet

    (Université Clermont Auvergne, Université d’Auvergne, EA3849, CRCGM)

Abstract

Using a worldwide sample, we examine whether corporate social responsibility (CSR) performance has an impact on the value of cash holdings. We find that investors assign a higher value to cash held by firms that have a high CSR rating. This result is consistent with the idea that CSR policies are a means for managers to act in the shareholders’ interests by mitigating conflicts with stakeholders. Finally, we reveal that CSR performance has a positive impact on the value of cash holdings only for firms which operate in countries where shareholders are well protected from expropriation by managers and in countries where the institutional quality is high.

Suggested Citation

  • Mohamed Arouri & Guillaume Pijourlet, 2017. "CSR Performance and the Value of Cash Holdings: International Evidence," Journal of Business Ethics, Springer, vol. 140(2), pages 263-284, January.
    • Handle: RePEc:kap:jbuset:v:140:y:2017:i:2:d:10.1007_s10551-015-2658-5
    DOI: 10.1007/s10551-015-2658-5
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    More about this item

    Keywords

    Corporate social responsibility; Cash holdings; Investor protection; Value of cash;
    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
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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