The Determinant of Corporate Social Responsibility: A Study from CEO Ability Perspective
企業社會責任影響因素研究：基於管理者經營能力視角
Student thesis: Doctoral Thesis
Author(s)
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Detail(s)
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| Award date | 15 Mar 2018 |
Link(s)
| Permanent Link | https://scholars.cityu.edu.hk/en/theses/theses(fbdc11a9-b4c2-4f41-8803-b3dbcc0910cf).html |
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| Other link(s) | Links |
Abstract
The past decades have witnessed a steady increase in firms’ activities related to corporate social responsibility (CSR) around the world, and CSR has become an important research topic in both accounting and management literature. Prior studies have shown that a number of institutional, organizational and individual factors could affect a firm’s long-term and socially responsible activities. While, little is known about the role of chief executive officer (CEO) managerial ability on firms’ CSR performance.
This thesis aims to fill the gap and examines the impact of CEO’s managerial ability on firms’ CSR performance. Using a sample of U.S. publicly-listed firms over the period from 2003 to 2012, I find that firms’ CSR performance increases with CEO’s managerial ability. Firms with more able CEOs are more likely to have better CSR performance than firms with less able CEOs. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. I further find that the positive relation between CEO’s managerial ability and CSR is weakened for a CEO who is also the chair of the board and for a CEO who is close to retirement; is weaker for a board of directors whose power is weak and for a board of directors whose independence is low; and is also less pronounced for a firm which is located in high social capital county and for a firm which is headquartered in Democratic-leaning state. The results are robust after using difference-in-difference analyses, firm fixed effects and the multiple measures of CSR performance and managerial ability.
Overall, these results suggest that CEO’s managerial ability is an important determinant in firms’ CSR performance and the evidence is consistent with my conjecture that more able CEOs have weaker career concerns so that these CEOs are more willing to undertake long-term investments in socially-beneficial activities, leading to better CSR performance.
This thesis aims to fill the gap and examines the impact of CEO’s managerial ability on firms’ CSR performance. Using a sample of U.S. publicly-listed firms over the period from 2003 to 2012, I find that firms’ CSR performance increases with CEO’s managerial ability. Firms with more able CEOs are more likely to have better CSR performance than firms with less able CEOs. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. I further find that the positive relation between CEO’s managerial ability and CSR is weakened for a CEO who is also the chair of the board and for a CEO who is close to retirement; is weaker for a board of directors whose power is weak and for a board of directors whose independence is low; and is also less pronounced for a firm which is located in high social capital county and for a firm which is headquartered in Democratic-leaning state. The results are robust after using difference-in-difference analyses, firm fixed effects and the multiple measures of CSR performance and managerial ability.
Overall, these results suggest that CEO’s managerial ability is an important determinant in firms’ CSR performance and the evidence is consistent with my conjecture that more able CEOs have weaker career concerns so that these CEOs are more willing to undertake long-term investments in socially-beneficial activities, leading to better CSR performance.
