Abstract
The purpose of this study is to extend prior research on this topic by investigating whether the impact of ownership concentration moderates the link between corporate social performance (CSP) and financial performance (FP). This study uses a set of unique, hand-collected pollution control data to measure CSP, based on a sample of Taiwanese listed companies during the period from 1996 to 2006. The results of the empirical analysis provide firm support for the idea that the divergence between control rights and the cash flow rights of controlling owners negatively moderates the link between social and short- and long-run FP.
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Notes
Maron (2006) indicates that corporate social performance (CSP) has multiple dimensional constructs that measure organizational behavior across a wide range of dimensions, and the current study uses one of these measures, which is the extent that a firm invests in pollution control equipment.
Claessens et al. (2000) report that the average ratio of cash flow to voting right in East Asian companies is lower than that of Western European companies (i.e., 0.75 < 0.87).
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Acknowledgments
The authors thank two anonymous referees for their invaluable advice. We also thank Joëlle Vanhamme, JBE’s Editor, for her cordiality and encouragement through the review process. Research support from the National Science Council, Taiwan (grant # NCS 102-2410-H-018-040) is gratefully acknowledged. All errors are our own.
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Peng, CW., Yang, ML. The Effect of Corporate Social Performance on Financial Performance: The Moderating Effect of Ownership Concentration. J Bus Ethics 123, 171–182 (2014). https://doi.org/10.1007/s10551-013-1809-9
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DOI: https://doi.org/10.1007/s10551-013-1809-9