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

12 Pages Posted: 3 Jun 2016

See all articles by Pattanaporn Chatjuthamard

Pattanaporn Chatjuthamard

Chulalongkorn University

Pornsit Jiraporn

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

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: June 2016

Abstract

Motivated by the ongoing debate on the costs and benefits of corporate social responsibility (CSR), we explore how talented managers view CSR investments. Based on nearly 20,000 observations across 17 years, our evidence reveals a nonmonotonic effect of managerial talent on CSR. Exploiting a novel measure of managerial ability, 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. In 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

Chatjuthamard, Pattanaporn and Jiraporn, Pornsit and Tong, Shenghui and Singh, Manohar, Managerial Talent and Corporate Social Responsibility (CSR): How Do Talented Managers View Corporate Social Responsibility? (June 2016). International Review of Finance, Vol. 16, Issue 2, pp. 265-276, 2016. Available at SSRN: https://ssrn.com/abstract=2788295 or http://dx.doi.org/10.1111/irfi.12067

Pattanaporn Chatjuthamard (Contact Author)

Chulalongkorn University

Bangkok 10330
Thailand

Pornsit Jiraporn

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

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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