EconPapers    
Economics at your fingertips  
 

CSR variability, managerial risk aversion, and hostile takeover threats

Takakorn Likitapiwat, Sirimon Treepongkaruna and Pornsit Jiraporn

Corporate Social Responsibility and Environmental Management, 2023, vol. 30, issue 2, 773-790

Abstract: The quiet life hypothesis argues that, when managers are insulated from the discipline of the takeover market, they tend to be less ambitious, avoiding risky and complex investments that require more managerial time and efforts. In other words, they prefer to live a “quiet life.” Exploiting a distinctive measure of takeover vulnerability principally based on the staggered passage of state legislations, we investigate the quiet life hypothesis using corporate social performance. Our results show that more takeover exposure significantly raises CSR variability, consistent with the prediction of the quiet life hypothesis, where managers adopt riskier CSR strategies and investments when they are more exposed to takeover threats, resulting in higher CSR volatility. Specifically, an increase in takeover exposure by one standard deviation raises CSR variability by 5.23%–6.73%. Additional analysis corroborates the results, including propensity score matching, instrumental‐variable analysis, Lewbel's heteroscedastic identification, and entropy balancing.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/csr.2387

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:wly:corsem:v:30:y:2023:i:2:p:773-790

Access Statistics for this article

More articles in Corporate Social Responsibility and Environmental Management from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-01-18
Handle: RePEc:wly:corsem:v:30:y:2023:i:2:p:773-790