Earticle

초록

영어

We investigate whether the alignment of chief executive officer (CEO) and shareholders wealth influences decisions on engaging in stakeholder-oriented activities. CEOs maximizing their own utility are more likely to engage in such activities when they are not strongly aligned with shareholders wealth. Empirically, firms with CEOs whose wealth is more sensitive to the firm value are less likely to engage in external activities (communities, environments, and human rights). We find that this negative effect is mitigated after the conflict of interests between shareholders and stakeholders is reduced by the constituency statutes. Furthermore, after an exogenous reduction in the alignment of CEO and shareholders wealth, we find that firms that were prone to overinvestment before this exogenous reduction are more likely to engage stakeholder-oriented activities. Overall, our analysis suggests that strong alignment of CEO and shareholders wealth effectively prevents overinvestment in stakeholderoriented activities that might be motivated by agency problems.

목차

Highlights
Abstract
1. Introduction
2. Theoretical prediction
2.1. The simple model
2.2. Numerical example and empirical prediction
3. Data and sample selection
4. Empirical evidence
4.1. Baseline regression
4.2. Evidence from CEO turnover
4.3. Evidence from the adoption of Constituency Statutes
4.4. Evidence from the adoption of FAS 123R
5. Robustness tests
5.1. Additional test for CEO characteristics and governance effects
5.2. Alternative measurement
6. Conclusion
Acknowledgements
References

키워드

저자

• Kyumin Cho [ School of Business and Technology Management, Korea Advanced Institute of Science and Technology, 291, Daehak-ro, Yuseong-gu, Daejeon, Republic of Korea ]
• Hyeong Joon Kim [ School of Business and Technology Management, Korea Advanced Institute of Science and Technology, 291, Daehak-ro, Yuseong-gu, Daejeon, Republic of Korea ]
• Seongjae Mun [ School of Business and Technology Management, Korea Advanced Institute of Science and Technology, 291, Daehak-ro, Yuseong-gu, Daejeon, Republic of Korea ]
• Seung Hun Han [ School of Business and Technology Management, Korea Advanced Institute of Science and Technology, 291, Daehak-ro, Yuseong-gu, Daejeon, Republic of Korea ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330