General managerial skills and corporate social responsibility

Jie Chen, Xicheng Liu, Wei Song and Si Zhou ()

Journal of Empirical Finance, 2020, vol. 55, issue C, 43-59

Abstract: We show that a CEO’s general managerial skills are negatively related to the level of corporate social responsibility (CSR) undertaken by the firm. This finding is robust to alternative measures of CSR and alternative econometric specifications. The negative effect of general managerial skills on CSR persists when we attempt to address potential endogeneity concerns by employing propensity score matching and an instrumental variables approach. Further, supplementary analysis reveals that this negative effect is stronger in tight labor markets and in firms where shareholders are more short term oriented, consistent with the notion that the broader set of outside options available to generalist chief executive officers acts as a labor market mechanism that makes them less concerned about the firm’s long-term prosperity and thus more reluctant to commit to CSR.

Keywords: Corporate social responsibility; General human capital; Market for executives (search for similar items in EconPapers)
JEL-codes: G32 G34 J24 M14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:empfin:v:55:y:2020:i:c:p:43-59

DOI: 10.1016/j.jempfin.2019.10.007

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