Stock Pledge by Controlling Shareholder and Corporate Social Responsibility
Stock Pledge by Controlling Shareholder and Corporate Social Responsibility
Wen Wen(International Business School Beijing Foreign Studies University, China); Lijing Tong(Beijing Jiaotong University); Xie Lu(School of Management Jinan University, China); Zhang Siting(School of Management Jinan University, China)
52권 5호, 762~792쪽
초록
We examine the influence of stock pledge by controlling shareholders on corporate social responsibility (CSR). Results show that firms exhibit poorer CSR performance when the controlling shareholders have more shares under pledge to financial institutions. Further analyses suggest that the negative relation between stock pledge and CSR only exists in financially constrained firms and non‐state‐owned firms, in which the pledging controlling shareholders have greater incentive to increase stock price and maintain their control rights. Our findings support a margin call hypothesis that firms tend to cut off CSR spending to improve short‐term financial performance and reduce the risk of losing control rights.
Abstract
We examine the influence of stock pledge by controlling shareholders on corporate social responsibility (CSR). Results show that firms exhibit poorer CSR performance when the controlling shareholders have more shares under pledge to financial institutions. Further analyses suggest that the negative relation between stock pledge and CSR only exists in financially constrained firms and non‐state‐owned firms, in which the pledging controlling shareholders have greater incentive to increase stock price and maintain their control rights. Our findings support a margin call hypothesis that firms tend to cut off CSR spending to improve short‐term financial performance and reduce the risk of losing control rights.
- 발행기관:
- 한국증권학회
- 분류:
- 경영학