How Do Powerful CEOs View Corporate Social Responsibility (CSR)? An Empirical Note

14 Pages Posted: 6 Mar 2013

See all articles by Pornsit Jiraporn

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Pandej Chintrakarn

Mahidol University International College (MUIC)

Date Written: March 5, 2013

Abstract

We explore how powerful CEOs view investments in corporate social responsibility (CSR). The agency view suggests that CEOs invest in CSR to enhance their own private benefits. On the contrary, the conflict resolution view argues that CSR investments are made to resolve the conflicts among various stakeholders. Using Bebchuk, Cremers, and Peyer’s (2011) CEO Pay Slice (CPS) to measure CEO power, we show that the association between CEO power and CSR is non-monotonic. When the CEO is relatively less powerful, an increase in CEO power leads to more CSR engagement. However, as the CEO becomes substantially more powerful, he is more entrenched and no longer invests more in CSR. In fact, when CEO power goes beyond a certain threshold, more powerful CEOs significantly reduce CSR investments.

Keywords: CEO power, corporate social responsibility, CSR, agency theory, agency conflict

JEL Classification: G30, G34

Suggested Citation

Jiraporn, Pornsit and Chintrakarn, Pandej, How Do Powerful CEOs View Corporate Social Responsibility (CSR)? An Empirical Note (March 5, 2013). Available at SSRN: https://ssrn.com/abstract=2228937 or http://dx.doi.org/10.2139/ssrn.2228937

Pornsit Jiraporn (Contact Author)

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

Pandej Chintrakarn

Mahidol University International College (MUIC) ( email )

999 Buddhamonthon 4 Road
Salaya, Nakhonpathom, 73170
Thailand
66 (0) 2441 5090 (Phone)
66 (0) 2441 9745 (Fax)

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