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Why don't all firms do 'good' equally?

Author

Listed:
  • Shantanu Banerjee
  • Swarnodeep Homroy
  • Aurelie Cecile Dominique Slechten

Abstract

This paper shows that di¤erence in equity holding structure leads to heterogeneous firm preference for investing in social capital (CSR). In our theoretical model managerial and customer preferences jointly influence CSR investments. We show that if managerial preference is high, social investments of firms are higher, independent of customer preference. We test our theoretical predications using data from Indian firms. We show that firms with concentrated shareholding invest more in CSR. Firms with dispersed shareholding increase social investments if they export to the United States and the European Union, but they decrease these expenses in reaction to antidumping penalties.

Suggested Citation

  • Shantanu Banerjee & Swarnodeep Homroy & Aurelie Cecile Dominique Slechten, 2016. "Why don't all firms do 'good' equally?," Working Papers 115969339, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:115969339
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Controlling Stakeholding; Public Goods; Corporate Social Responsibility;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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