Corporate social responsibility and insider horizon

Mark Shackleton, Yaqiong Yao and Ziran Zuo

Journal of Corporate Finance, 2025, vol. 90, issue C

Abstract: We show a positive relation between insider horizon and a firm's corporate social responsibility (CSR) performance. This positive relation is likely driven by good internal governance rather than agency problems. To support a causal interpretation, we adopt managerial career horizon reductions and the rejection of inevitable disclosure doctrine as exogenous shocks to insider horizon. We find that the observed positive effects are stronger when firms have higher ownership of long-term and socially responsible institutional investors, when insiders sign long-term compensation contracts, and when firms face less takeover pressure. We document the real effects of long-horizon insiders using various raw CSR metrics. Overall, our results indicate that insiders' long-term orientation can promote CSR.

Keywords: CSR; Insider investment horizon; Short-termism; Corporate governance (search for similar items in EconPapers)
JEL-codes: G14 G23 G32 M14 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:90:y:2025:i:c:s0929119924001585

DOI: 10.1016/j.jcorpfin.2024.102696

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