How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention

Michael Greiner; Jing Sun

doi:10.1002/csr.2148

journal article May 12, 2021

How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention

Michael Greiner

Jing Sun

Corporate Social Responsibility and Environmental Management Vol. 28 No. 4 pp. 1360-1375 · Wiley

View at Publisher Save 10.1002/csr.2148

Abstract

AbstractOver the past few years, scholarly interest in corporate social responsibility (CSR) has been increasing. However, research on the relationship between CSR and firm performance has revealed a complicated relationship. In this paper, we argue that part of the basis for the generally positive relationship between CSR and firm performance might come from a reduction in agency costs. Relying on behavioral agency theory, we construct a model in which CSR moderates the impact of the agency problem on specific firm outcomes, including firm performance, the use of stock options, and goodwill. Based on panel data of publicly traded U.S. firms from 1999 to 2013, we find support for that model. These findings suggest the role of CSR in improving corporate governance efficiency through mitigating agency problems inside the firm.

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Details

Published: May 12, 2021
Vol/Issue: 28(4)
Pages: 1360-1375
License: View

Authors

M

Michael Greiner

School of Business Administration Oakland University Rochester Michigan USA

J

Jing Sun

Mike Ilitch School of Business Wayne State University Detroit Michigan USA

Cite This Article

Michael Greiner, Jing Sun (2021). How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention. Corporate Social Responsibility and Environmental Management, 28(4), 1360-1375. https://doi.org/10.1002/csr.2148

How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention

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