Abstract

http://ssrn.com/abstract=1962120
 
 

Citations (8)



 


 



Do Managers Do Good with Other Peoples' Money?


Ing-Haw Cheng


Tuck School of Business at Dartmouth

Harrison G. Hong


Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Kelly Shue


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

April 25, 2016

AFA 2013 San Diego Meetings Paper
UCD & CalPERS Sustainability & Finance Symposium 2013
Fama-Miller Working Paper
Chicago Booth Research Paper No. 12-47

Abstract:     
We show that spending on corporate social responsibility (CSR) is due partly to agency problems. Using the 2003 Dividend Tax Cut, which increased after-tax insider ownership, we find that firms with moderate levels of insider ownership cut CSR by more than firms with low levels (where the tax cut has no effect) and high levels (where agency is less of an issue). Moderate insider-ownership firms experienced larger increases in valuation. Similar insights hold in a regression-discontinuity design of close votes on shareholder-governance proposals. Individuals did not offset CSR cuts with private giving, suggesting a trade-off between governance and public goods.

Number of Pages in PDF File: 73

Keywords: corporate social responsibility, agency costs

JEL Classification: G30, G31, G35


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Date posted: November 20, 2011 ; Last revised: May 14, 2016

Suggested Citation

Cheng, Ing-Haw and Hong, Harrison G. and Shue, Kelly, Do Managers Do Good with Other Peoples' Money? (April 25, 2016). AFA 2013 San Diego Meetings Paper; Fama-Miller Working Paper; UCD & CalPERS Sustainability & Finance Symposium 2013; Chicago Booth Research Paper No. 12-47. Available at SSRN: http://ssrn.com/abstract=1962120 or http://dx.doi.org/10.2139/ssrn.1962120

Contact Information

Ing-Haw Cheng
Tuck School of Business at Dartmouth ( email )
Hanover, NH 03755
United States
Harrison G. Hong (Contact Author)
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Kelly Shue
University of Chicago - Booth School of Business ( email )
5807 S Woodlawn Avenue
Chicago, IL 60637
United States
HOME PAGE: http://https://sites.google.com/site/kellyshue/

Chicago Booth School of Business Logo

National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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