Ilitch School management professor and Ph.D. alum published in Corporate Social Responsibility and Environmental Management
Mike Ilitch School of Business Assistant Professor of Management Jing Sun and Oakland University Assistant Professor of Management Mike Greiner (Ph.D. ’18) have had an article published in Corporate Social Responsibility and Environmental Management, which “provides a resource for the ever-increasing number of organizations concerned about social and environmental responsibilities in the context of sustainable development.”
The article is titled “How Corporate Social Responsibility Can Incentivize Top Managers: A commitment to sustainability as an agency intervention.”
Over 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.