Managerial entrenchment and corporate social performance

Jordi Surroca, Josep A. Tribó

Research output: Contribution to journalArticlepeer-review

276 Scopus citations

Abstract

We examine empirically the relationships amongst managerial entrenchment practices, social performance, and financial performance. We hypothesize that entrenched managers may collude with non-shareholder stakeholders in order to reinforce their entrenchment strategy; this is particularly so in firms that have efficient internal control mechanisms. Moreover, we prove that the combination of entrenchment strategies and the implementation of socially responsible actions have particularly negative effects on financial performance. We test these contentions with a sample of 358 companies, from 22 different countries, for the period 2002-2005.

Original languageEnglish
Pages (from-to)748-789
Number of pages42
JournalJournal of Business Finance and Accounting
Volume35
Issue number5-6
DOIs
StatePublished - Jun 2008

Keywords

  • Corporate governance
  • Corporate social performance
  • Earnings management
  • Stakeholder activism

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