Corporate Social Responsibility and Insider Horizon

56 Pages Posted: 9 Feb 2022 Last revised: 25 Apr 2022

See all articles by Mark B. Shackleton

Mark B. Shackleton

Lancaster University - Department of Accounting and Finance

Chelsea Yaqiong Yao

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

Ziran Zuo

Lancaster University - Department of Accounting and Finance

Date Written: April 23, 2022

Abstract

Insiders, including directors and managers, are instrumental in establishing corporate strategy and steering a firm’s direction. We document a positive relation between insider horizon and firms’ corporate social responsibility (CSR) performance. This positive relation is likely driven by good internal governance rather than agency problems. We adopt the enactment of antitakeover laws and the Inevitable Disclosure Doctrine as shocks to support a causal interpretation. We find that positive effects are stronger when firms have higher ownership of long-term institutional investors and when insiders sign long-term compensation contracts. Finally, we document the real effects by using various raw CSR metrics.

Keywords: CSR, insider investment horizon, short-termism, corporate governance

JEL Classification: G14, G23, G32, M14

Suggested Citation

Shackleton, Mark B. and Yao, Yaqiong and Zuo, Ziran, Corporate Social Responsibility and Insider Horizon (April 23, 2022). Available at SSRN: https://ssrn.com/abstract=3995694 or http://dx.doi.org/10.2139/ssrn.3995694

Mark B. Shackleton

Lancaster University - Department of Accounting and Finance ( email )

The Management School
Lancaster LA1 4YX
United Kingdom
44 1524 594131 (Phone)
44 1524 847321 (Fax)

Yaqiong Yao (Contact Author)

Lancaster University - Lancaster University Management School ( email )

Department of Accounting and Finance
Lancaster University Management School
Lancaster, LA1 4YX
United Kingdom

HOME PAGE: http://www.chelseayao.com

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

Stern School of Business
44 West 4th Street
New York, NY NY 10012
United States

Ziran Zuo

Lancaster University - Department of Accounting and Finance ( email )

The Management School
Lancaster LA1 4YX
United Kingdom

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