Why don't all firms do 'good' equally?

Shantanu Banerjee, Swarnodeep Homroy and Aurelie Cecile Dominique Slechten

No 115969339, Working Papers from Lancaster University Management School, Economics Department

Abstract: This paper shows that di¤erence in equity holding structure leads to heterogeneous firm preference for investing in social capital (CSR). In our theoretical model managerial and customer preferences jointly influence CSR investments. We show that if managerial preference is high, social investments of firms are higher, independent of customer preference. We test our theoretical predications using data from Indian firms. We show that firms with concentrated shareholding invest more in CSR. Firms with dispersed shareholding increase social investments if they export to the United States and the European Union, but they decrease these expenses in reaction to antidumping penalties.

Keywords: Controlling Stakeholding; Public Goods; Corporate Social Responsibility (search for similar items in EconPapers)
JEL-codes: D13 G28 G32 J12 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-bec and nep-cfn
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