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Shareholder wealth maximization, business ethics and social responsibility

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  • Poitras, Geoffrey

Abstract

The primary objective of this article is to develop a framework for analyzing the ethical foundations and implications of shareholder wealth maximization (SWM). Distinctions between SWM and the more widely examined construct of profit nfaximization are identified, the most significant being the central role played in SWM by the market mechanism for pricing the corporation's securities. It is argued that empirical tests concerned with evaluating the ethical implications of SWM will almost surely involve a joint hypothesis. A number of recent empirical studies aimed at testing hypotheses with explicit ethical content are reviewed.

Suggested Citation

  • Poitras, Geoffrey, 1994. "Shareholder wealth maximization, business ethics and social responsibility," MPRA Paper 113221, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113221
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    File URL: https://mpra.ub.uni-muenchen.de/113221/8/MPRA_paper_113221.pdf
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    References listed on IDEAS

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    Cited by:

    1. Inci, A. Can, 2012. "Insider trading activity, tenure length, and managerial compensation," Global Finance Journal, Elsevier, vol. 23(3), pages 151-166.
    2. Borochin, Paul, 2020. "The information content of real operating performance measures from the airline industry," Journal of Financial Markets, Elsevier, vol. 50(C).

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    More about this item

    Keywords

    Shareholder wealth maximization; Business Ethics; ESG;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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