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The Relationship between CEO Governance and Social Responsibility of Service Firms

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  • Sang-Hyun Ji

    (Division of Business and Commerce, Baekseok University, Chungcheongnam-do 31065, Korea)

  • Ki-Chang Yoon

    (Department of Business Administration, Kunsan National University, Jeollabuk-do 54150, Korea)

  • Joshua Park

    (SolBridge International School of Business, Woosong University, Daejeon 34613, Korea)

  • Sang-Bong An

    (Department of Business Administration, Shingyeong University, Gyeonggi-do 18274, Korea)

  • Han-Mo Oh

    (Department of International Trade, Chonbuk National University, 567 Baekje-daero, Deokjin-gu, Jeonju-si Jeollabuk-do 54896, Korea)

Abstract

Although it is widely accepted that corporate social responsibility (CSR) is key to obtaining business sustainability, there is a significant lack of empirical tests on the longer-term benefits of CSR in academic literature. The objective of our study was to examine the effects of chief executive officer (CEO) governance on CSR in service firms. We used CEO pay slice (CPS) to measure CEO governance and the Korea Economic Justice Institute Index (KEJI) to measure the level of CSR activities. CPS was measured using the compensation information of the board of directors in their business reports. The KEJI was obtained from the website of Citizens’ Coalition for Economic Justice. The sample selected from listed firms consisting of 260 observations was collected from 2013 to 2015 at the TS-2000 and the FnGuide. The results showed that the CPS has a significant negative impact on the level of CSR activities in service firms. Specifically, CPS has a significant negative impact on the level of CSR activities in the areas of human, environment, and society at a significant level of one percent. Based on these results, higher CEO governance is expected to mean lower CSR in service firms. This paper contributes to the field of research in that it is the first research on the relationship between CEO governance and the level of CSR activities in service firms.

Suggested Citation

  • Sang-Hyun Ji & Ki-Chang Yoon & Joshua Park & Sang-Bong An & Han-Mo Oh, 2019. "The Relationship between CEO Governance and Social Responsibility of Service Firms," Sustainability, MDPI, vol. 11(18), pages 1-13, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:18:p:4942-:d:265897
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    References listed on IDEAS

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    1. Carroll, Archie B., 1991. "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders," Business Horizons, Elsevier, vol. 34(4), pages 39-48.
    2. Bebchuk, Lucian A. & Cremers, K.J. Martijn & Peyer, Urs C., 2011. "The CEO pay slice," Journal of Financial Economics, Elsevier, vol. 102(1), pages 199-221, October.
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    Cited by:

    1. Chang Seop Rhee & Sohee Woo & So-Jin Yu & Hyunjung Rhee, 2021. "Corporate Social Responsibility and Sustainable Employability: Empirical Evidence from Korea," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    2. Fuan Li & Xingyuan Wang & Rajiv Kashyap, 2019. "Socially Responsible Practice and CSR Orientation of Chinese Managers: The Role of Confucian Ethics and Confucian Dynamism," Sustainability, MDPI, vol. 11(23), pages 1-13, November.
    3. Yi Luo & Hua Jiang & Linzhi Zeng, 2023. "Linking Informative and Factual CSR Communication to Reputation: Understanding CSR Motives and Organizational Identification," Sustainability, MDPI, vol. 15(6), pages 1-22, March.
    4. Yingkai Tang & Aswad Akram & Lucian‐Ionel Cioca & Syed Ghulam Meran Shah & Muhammad Asim Ali Qureshi, 2021. "Whether an innovation act as a catalytic moderator between corporate social responsibility performance and stated owned and non‐state owned enterprises' performance or not? An evidence from Pakistani ," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(3), pages 1127-1141, May.

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