Rationales for a stakeholder model of corporate governance are based on enlightened self-interest, moral imperative, and/or externalities. Of these, the externalities rationale holds the most promise to justify a stakeholder focus. Recent evidence, however, indicates that the benefits of a...

This Article provides a new perspective on corporate philanthropy by examining a previously unnoticed mechanism through which corporate pro-sociality enhances firm value: signaling. In particular, cash donations can signal financial strength. A substantial and unexpected increase in the level of...

Written for the Chapman Law Review Symposium on “What Can Law & Economics Teach Us About the Corporate Social Responsibility Debate?,” this Article applies the lessons of public choice theory to examine corporate social responsibility. The Article adopts a broad definition of corporate...

We investigate the relationship between corporate social responsibility (CSR) and firm-level capital allocation efficiency. Using seminal investment-Q framework, we provide evidence that CSR distorts investment sensitivity to Q. We further determine that this effect of CSR is moderated by the...

This paper investigates the effect of customer concentration on corporate social responsibility (CSR) disclosures for a large sample of US firms. Using both corporate and government customer concentration, we find that firms with concentrated corporate customer are associated with significantly...

This paper examines the effect of foreign bank entry on local firms’ social performance. We find that foreign bank entry is associated with better performance of local firms in regard to corporate social responsibility (CSR). The effect is more pronounced when firms face less favorable...

We investigate the predictive power of corporate social culture, as measured by corporate social responsibility (CSR) intensity, on shareholder wealth when mergers and acquisitions (M&As) are carried out by managers with different traits. We find acquiring firms with talented managers are more...

The purpose of this paper is twofold. 1) We propose for the first time in the literature a theory (managerial learning hypothesis) that may explain why managers engage in corporate social responsibility (CSR). 2) We use an intuitive empirical methodology (Edmans et al. 2017) to test the...

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...

This paper presents a positive theory of corporate social responsibility set in a managerial capitalism context in which managers instead of markets allocate resources, including social expenditures. The theory focuses jointly on the operational management of the firm and on its social...