(The) effects of large institutional ownership and outside directors on corporate social performance : the moderating role of owner-CEO power

다국어 초록 (Multilingual Abstract)

Firms’ corporate social performance has gained enormous attention from corporate governance scholars. However, empirical researches have shown a lot of contradictory results. This paper analyses the impact of large institutional ownership and outside directors on firms’ CSP along with the moderating effect of the owner-CEO power in terms of ownership. The study attempts to explore the effects of large institutional ownership on CSP by arguing that the large extent of shareholdings indicates the abilities and incentives of institutional investors to encourage firms to invest more in CSP commitments. In addition, the role of outside directors on firms’ CSP is also examined by integrating agency theory and dependency theory. As the monitor of shareholders and resources provider, outside directors encourage firm to invest more in CSP. I also proposed that the influence of both governance mechanisms will be mitigate by a powerful CEO. The hypotheses are tested using a sample which consists of 194 firms in Korea. The empirical results indicated that the first two direct effects of institutional ownership and outside directors are supported. Furthermore, the results also indicated the effects of CEO power on the relationship of outside directors and firms’ CSP.

목차 (Table of Contents)

• TABLE OF CONTENTS
• I.Introduction 1
• II.Theory and hypothesis 4
• 1.Corporate social performance 4
• 1.1 Definition of Corporate Social Responsibilities 4
• 1.2 Relationship between CSP and firm financial outcomes5
• 2.Large institutional ownership 7
• 2.1 Institutional ownership and firm strategy 8
• 2.2 Motivation of large Institutional ownership on CSP 10
• 3.Outside Directors 12
• 3.1 The role of the outside directors 12
• 3.2 Outside directors and CSP 14
• 4.Owner-CEO power 15
• III.Method 19
• 1.Data and sample selection 19
• 2.Variables 20
• 2.1 Dependent variable 20
• 2.2 Independent variables 21
• 2.3 Moderating variable 22
• 2.4 Control variables 23
• 3.Analysis 25
• IV.Results 27
• V.Conclusion 29
• 1.Discussion 29
• 2.Limitations and future directions 31
• VI.References 33
• List of tables
• <Table 1> Keji index dimensions 21
• <Table 2> Sample distribution by industry 25
• < Table 3> Summary of variables 26
• < Table 4> Descriptive statistics and correlation 27
• <Table 5> Regression results 28