Back to Search
Start Over
What's in It for Me? CEOs' Rent-Seeking Motivations and Corporate Social Responsibility Decisions.
- Source :
- Journal of International Accounting Research; Summer2024, Vol. 23 Issue 2, p123-147, 25p
- Publication Year :
- 2024
-
Abstract
- Prior research has argued that companies in transition economies engage in corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree to make these politically driven CSR decisions that mainly benefit the controlling shareholders. We show that controlling shareholders may "bribe" the CEOs with greater compensation or perks—a form of economic rents extracted by the CEOs—to make CSR decisions, and such a pattern is more salient in local government-owned companies. We reason that these CSR activities reflect implicit contracting between the controlling shareholders and the CEOs. Through cross-section analyses, we find that the CEO's economic rents vary with local government fiscal needs, the firm's governance structure, and CEO power. Furthermore, we demonstrate that increases in CSR-linked compensation lead to a decline in shareholder value. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: D72; M12; P26. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 15426297
- Volume :
- 23
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of International Accounting Research
- Publication Type :
- Academic Journal
- Accession number :
- 178145624
- Full Text :
- https://doi.org/10.2308/JIAR-2023-027