EconPapers    
Economics at your fingertips  
 

Prosocial managers, employee motivation, and the creation of shareholder value

Agne Kajackaite and Dirk Sliwka

Journal of Economic Behavior & Organization, 2020, vol. 172, issue C, 217-235

Abstract: We argue that when contracts are incomplete it is not necessarily in the interest even of money maximizing shareholders to pick a manager who intends to maximize shareholder value. We first show in a formal model, as well as using observational data from over 900 firms and in a series of lab experiments that choosing a manager who has a preference to spend resources for social causes can increase employee motivation. In turn, losses in shareholder value due to investments in social causes may be offset by gains in employees’ performance. The selection of a manager with social interests serves as a commitment device that raises employee motivation.

Keywords: Shareholder value; Corporate social responsibility; Incentives; Motivation; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D03 D21 J33 M52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268120300652
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:172:y:2020:i:c:p:217-235

DOI: 10.1016/j.jebo.2020.02.021

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-10-10
Handle: RePEc:eee:jeborg:v:172:y:2020:i:c:p:217-235