Socially responsible firms

A. Ferrell, Hao Liang, Luc Renneboog

Research output: Contribution to journalArticleScientificpeer-review

12 Citations (Scopus)
256 Downloads (Pure)


In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy by means of an instrumental variable approach, we find that well-governed firms that suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find that a positive relation exists between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.
Original languageEnglish
Pages (from-to)585-606
JournalJournal of Financial Economics
Issue number3
Publication statusPublished - Dec 2016


  • corporate social responsibility
  • agency costs
  • corporate governance


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