||Evaluating the effects of corporate social responsibility on firm value of international company with weighted international net corruption conception index
||Graduate Institute of Finance & Banking
corporate social responsibility
本篇研究主要探討以全球貪腐為總體的環境下，企業社會責任對於公司價值的影響。本研究以2000年至2008年的美國公司資料為主，並考量公司各部門包含全球190個國家的貪腐程度。我們利用Berger and Ofek (1995) 所提出的超額價值作為衡量公司價值的指標，並調整Pantzalis, Park, Sutton (2008) 的方法以估計加權國際化貪腐指數。研究目的在於了解企業社會責任是否會對公司的價值造成影響。
近年來，企業社會責任對公司價值造成的影響沒有定論，McWilliams (2000)認為兩者之間並無相關，Waddock and Graves (1997) 和Wright and Ferris (1997)則有不同的觀點。我們根據McWilliams and Siegel (2001)將企業社會責任視為投資策略，而公司在追求公司價值極大化的假設下，考慮企業社會責任的成本效益。因此，我們試圖討論企業社會責任是否會對公司價值產生正面的影響。模型當中，我們除了考慮貪腐的影響，同時我們也納入多角化及其他控制變數。研究結果指出，產業多角化會增加企業社會責任減損公司價值的程度。另外，我們也發現對於有競爭優勢的公司而言，企業社會責任會增加其公司價值，這些結論大致上合乎我們的預期。
This paper examines the effects of corporate social responsibility on firm value with the view of global corruption macro-environment. We use data of American firms of the period between 2000 and 2008 and consider the overall corruption level of 190 countries of each segment in firms. We apply excess value method which is developed by Berger and Ofek (1995) as a measure of firm value. Likewise, we modify the method proposed by Pantzalis, Park, Sutton (2008) to estimate the weighted international corruption level. Our major goal is to investigate whether corporate social responsibility will exert influences on firm value.
Recent studies by McWilliams (2000) indicate no relationship between CSR and firm value, a positive relationship is indicated by Waddock and Graves (1997), and a negative relationship by Wright and Ferris (1997). Under the assumption that firms try to maximize the firm value, we consider the corporate social responsibility as an investment strategy and use the cost-benefit principle provided by McWilliams and Siegel (2001). Therefore, we try to examine that corporate social responsibility has positive impacts on firm value. In our model, not only do we consider the impacts of corruption, but we also include diversification effects and other control variables. Meanwhile, we observe that the value-reducing effect from corporate social responsibility would be greater on industrially diversified companies. Moreover, we also find a positive relationship between corporate social responsibility and firm value when we look into dominant firms with competitive advantages. Generally speaking, these conclusions correspond to our anticipations.
TABLE OF CONTENT VII
FIGURE OF CONTENT VIII
Chapter 1 Introduction 1
1.1 Research Motivations and Backgrounds 1
1.2 Research Objective 2
1.3 Research importance 3
1.4 Research framework 4
Chapter 2 Literature Review and Hypothesis Development 6
2.1 Prior studies on the effects of corporate social responsibility 6
2.1.1 Definition of corporate social responsibility (CSR) 6
2.1.2 Conflicts of CSR contribution 7
2.1.3 Four lenses of CSR: Corporate culture, Ethic, Legal responsibility, and Environment and economic performance 8
2.1.4 Corporate social performance (CSP) 10
2.2 Prior studies related to firm value 12
2.2.1 Corruption level 12
2.2.2 Industrial and international diversification 13
2.2.3 Earnings volatility and cash flow volatility 14
2.2.4 Capital structure 14
2.2.5 Asymmetric information 15
2.3 Hypothesis development 16
Chapter 3 Data and Methodology 18
3.1 Sample selection and description 18
3.2 Estimating firm value – Excess Value (EV) 19
3.3 Corporate social responsibility (CSR) index 20
3.4 Weighted international corruption index (WINCPI) 21
3.5 Control variables selection 23
3.6 Empirical model 24
Chapter 4 Empirical result 27
4.1 Summary statistics 27
4.2 Cross section result with corporate social responsibility and firm value 28
4.3 Interaction effect of corporate social responsibility and industrial diversification on firm value 30
4.4 Cross section result with corporate social responsibility and firm value of dominant companies 32
Chapter 5 Research conclusions and suggestions 36
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