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Asian Review of Financial Research, Vol., No..
pp.546~580
pp.546~580
Impact of Controlling Shareholders on Corporate Social Responsibility under External Financial Constraints
Hee Sub Byun Korea Deposit Insurance Corporation Cheonggyechun-no 30, Jung-gu, Seoul, 100-180, Korea
Ji Hye Lee Korea University Business School 145 Anam-ro, Seongbuk-gu, Seoul, 136-701, Korea
Kyung Suh Park Korea University Business School 145 Anam-ro, Seongbuk-gu, Seoul, 136-701, Korea
This study examines the relationship between the ownership of controlling shareholders and corporate social responsibility in Korea under external financial constraints. Empirical results show that a negative relationship is observed only in firms with fewer external financial constraints, while it disappears for firms with greater financial constraints. We reach a similar conclusion when we use the level of environmental management as a proxy for corporate social responsibility. These results confirm that external financial constraints act as a monitoring mechanism and mitigate the agency problem of controlling shareholders.
Hee Sub Byun
Ji Hye Lee
Kyung Suh Park
This study examines the relationship between the ownership of controlling shareholders and corporate social responsibility in Korea under external financial constraints. Empirical results show that a negative relationship is observed only in firms with fewer external financial constraints, while it disappears for firms with greater financial constraints. We reach a similar conclusion when we use the level of environmental management as a proxy for corporate social responsibility. These results confirm that external financial constraints act as a monitoring mechanism and mitigate the agency problem of controlling shareholders.
Controlling shareholders,Conflict of interest,Corporate social responsibility,External financialconstraints,Korea.
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