Agency problems and corporate social responsibility: Evidence from shareholder-creditor mergers

Hien T. Nguyen, Hieu V. Phan and Hong Vo

International Review of Financial Analysis, 2023, vol. 90, issue C

Abstract: We show that the presence of dual holders following the mergers between institutional shareholders and creditors of industry firms leads to a decrease in the firms' excessive corporate social responsibility (CSR) activities. The negative effect of dual holders on CSR activities is stronger for firms with more severe conflict of interest between shareholders and creditors or managerial agency problems. Further analysis indicates that decreased CSR activities are associated with greater firm value. Our findings provide evidence that dual holders mitigate agency-motivated CSR activities.

Keywords: Corporate social responsibility; Dual holders; Agency problems; Mergers and acquisitions (search for similar items in EconPapers)
JEL-codes: G21 G23 G32 G34 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004532

DOI: 10.1016/j.irfa.2023.102937

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