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CSR Performance and the Value of Cash Holdings: International Evidence

Mohamed Arouri () and Guillaume Pijourlet ()
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Guillaume Pijourlet: Université Clermont Auvergne, Université d’Auvergne, EA3849, CRCGM

Journal of Business Ethics, 2017, vol. 140, issue 2, No 5, 263-284

Abstract: Abstract Using a worldwide sample, we examine whether corporate social responsibility (CSR) performance has an impact on the value of cash holdings. We find that investors assign a higher value to cash held by firms that have a high CSR rating. This result is consistent with the idea that CSR policies are a means for managers to act in the shareholders’ interests by mitigating conflicts with stakeholders. Finally, we reveal that CSR performance has a positive impact on the value of cash holdings only for firms which operate in countries where shareholders are well protected from expropriation by managers and in countries where the institutional quality is high.

Keywords: Corporate social responsibility; Cash holdings; Investor protection; Value of cash (search for similar items in EconPapers)
JEL-codes: G32 G34 M14 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10551-015-2658-5

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