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Valuing Stakeholder Governance: Property Rights, Stakeholder Mobilization, and the Value of Community Benefits Agreements

45 Pages Posted: 25 Nov 2016  

Sinziana Dorobantu

New York University (NYU) - Leonard N. Stern School of Business

Kate Odziemkowska

University of Pennsylvania - Management Department

Date Written: November 21, 2016

Abstract

While research has shown that good stakeholder relations increase the value of a firm, less is known about how specific types of stakeholder governance affect firm value. We examine the value of one such governance mechanism — community benefits agreements (CBAs) signed by firms and local communities — intended to minimize social conflict that disrupts access to valuable resources. We argue that shareholders evaluate more positively CBAs with local communities with strong property rights and histories of institutional action and extra-institutional mobilization because these communities are more likely to cause costly disruptions and delays for a firm. We evaluate these arguments by analyzing the cumulative abnormal returns associated with the unexpected announcement of 148 CBAs signed between mining companies and local indigenous communities in Canada.

Keywords: stakeholder governance, property rights, social movements, community benefits agreements

Suggested Citation

Dorobantu, Sinziana and Odziemkowska, Kate, Valuing Stakeholder Governance: Property Rights, Stakeholder Mobilization, and the Value of Community Benefits Agreements (November 21, 2016). Available at SSRN: https://ssrn.com/abstract=2873938

Sinziana Dorobantu (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY NY 10012
United States

Kate Odziemkowska

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

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