Managerial Talent and Corporate Social Responsibility (CSR): How Do Talented Managers View Corporate Social Responsibility?

17 Pages Posted: 17 Sep 2015

See all articles by Pornsit Jiraporn

Pornsit Jiraporn

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

Pattanaporn Chatjuthamard

Sasin GIBA

Shenghui Tong

Central University of Finance and Economics (CUFE)

Manohar Singh

Willamette University - Atkinson Graduate School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: September 15, 2015

Abstract

Motivated by the on-going debate on the costs and benefits of CSR, we explore how talented managers view CSR investments. Based on nearly 20,000 observations across 17 years, our evidence reveals a non-monotonic effect of managerial talent on CSR. Exploiting a novel measure of managerial ability developed by Demerjian et al. (2012), we find that talented managers view CSR investments favorably. However, only those with especially strong talent are in favor of CSR investments. For executives ranked above the 75th percentile in terms of managerial talent, an increase in managerial ability leads to more CSR investments, suggesting that these strongly talented managers perceive CSR as enhancing firm performance. By contrast, for those with weaker talent, CSR investments are negatively associated with managerial ability, implying that these weakly talented managers view CSR as a wasteful deployment of resources. Further evidence shows that our conclusion is unlikely confounded by endogeneity.

JEL Classification: M14, G32, G30

Suggested Citation

Jiraporn, Pornsit and Chatjuthamard, Pattanaporn and Tong, Shenghui and Singh, Manohar, Managerial Talent and Corporate Social Responsibility (CSR): How Do Talented Managers View Corporate Social Responsibility? (September 15, 2015). Available at SSRN: https://ssrn.com/abstract=2660936 or http://dx.doi.org/10.2139/ssrn.2660936

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

Pattanaporn Chatjuthamard

Sasin GIBA ( email )

Bangkok
Thailand

Shenghui Tong

Central University of Finance and Economics (CUFE) ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

Manohar Singh

Willamette University - Atkinson Graduate School of Management ( email )

900 State Street
Salem, OR 97301
United States

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