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General managerial skills and corporate social responsibility / Jie Chen; Xicheng Liu; Wei Song; Si Zhou

Journal of Empirical Finance, Volume: 55, Pages: 43 - 59

Swansea University Author: Xicheng, Liu

  • Accepted Manuscript under embargo until: 5th May 2021

Abstract

We show that a CEO’s general managerial skills are negatively related to the level of corporate social responsibility (CSR) undertaken by the firm. This finding is robust to alternative measures of CSR and alternative econometric specifications. The negative effect of general managerial skills on CS...

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Published in: Journal of Empirical Finance
ISSN: 0927-5398
Published: Elsevier BV 2020
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa52654
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Abstract: We show that a CEO’s general managerial skills are negatively related to the level of corporate social responsibility (CSR) undertaken by the firm. This finding is robust to alternative measures of CSR and alternative econometric specifications. The negative effect of general managerial skills on CSR persists when we attempt to address potential endogeneity concerns by employing propensity score matching and an instrumental variables approach. Further, supplementary analysis reveals that this negative effect is stronger in tight labor markets and in firms where shareholders are more short term oriented, consistent with the notion that the broader set of outside options available to generalist chief executive officers acts as a labor market mechanism that makes them less concerned about the firm’s long-term prosperity and thus more reluctant to commit to CSR.
Start Page: 43
End Page: 59