How do powerful CEOs view corporate social responsibility (CSR)? An empirical note

Pornsit Jiraporn and P. Chintrakarn

Economics Letters, 2013, vol. 119, issue 3, 344-347

Abstract: We explore how powerful CEOs view investments in corporate social responsibility (CSR). The agency view suggests that CEOs invest in CSR to enhance their own private benefits. On the contrary, the conflict resolution view argues that CSR investments are made to resolve the conflicts among various stakeholders. Using Bebchuk et al. (2011) CEO Pay Slice (CPS) to measure CEO power, we show that the association between CEO power and CSR is non-monotonic. When the CEO is relatively less powerful, an increase in CEO power leads to more CSR engagement. However, as the CEO becomes substantially more powerful, he is more entrenched and no longer invests more in CSR. In fact, when CEO power goes beyond a certain threshold, more powerful CEOs significantly reduce CSR investments.

Keywords: CEO power; Corporate social responsibility; CSR; Agency theory; Agency conflict (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (85)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:119:y:2013:i:3:p:344-347

DOI: 10.1016/j.econlet.2013.03.026

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