Suchergebnisse

Abstract
With the emergence of sovereign wealth funds (SWFs) around the world managing equity of over $8 trillion, their impact on the corporate landscape and social welfare is being scrutinized. This study investigates whether and how SWFs incorporate environmental, social, and governance (ESG) considerations in their investment decisions in publicly listed corporations, as well as the subsequent evolution of target firms' ESG performance. We find that SWF funds do consider the level of past ESG performance as well as recent ESG score improvement when taking ownership stakes in listed companies. These results are driven by the SWF funds that do have an explicit or implicit ESG policy and are most transparent, and by SWF originating from developed countries and countries with civil law origins. In relation to engagement, we find by means of two natural experiments with exogenous shocks (the Deepwater Horizon catastrophe and Volkwagen diesel scandal) that the ESG scores do not change significantly more for firms in which SWFs have ownership stakes. This potentially suggests that SWFs in general do not actively steer their target firms towards higher levels of ESG.

A firm's corporate social responsibility (CSR) practice and its country's legal origin are strongly correlated. This relation is valid for various CSR ratings coming from several large datasets that comprise more than 23,000 large companies from 114 countries. We find that CSR is more strongly and consistently related to legal origins than to "doing good by doing well"-factors, and most firm and country characteristics such as ownership concentration, political institutions, and degree of globalization. In particular, companies from common law countries have lower level of CSR than companies from civil law countries, and Scandinavian civil law firms assume highest level of CSR. This link between legal origins and CSR seems to be explained by differences in ex post shareholder litigation risk as well as in stakeholder regulations and state involvement in the economy. Evidence from quasi-natural experiments such as scandals and natural disasters suggest that civil law firms are more responsive to CSR shocks than common law firms, and such responsiveness is not likely driven by declining market shares following the shock.

Do corporate donations enhance shareholder wealth or reflect agency problems? We address this question for a global sample of firms whereby we distinguish between charitable and political donations, as well as between donations in cash and in kind. We find that charitable donations are positively related to financial performance and firm value, which is consistent with the value-enhancement hypothesis. This positive effect on firm value is stronger for cash than in-kind donations. In contrast, political donations do not appear to enhance shareholder value, but rather tend to reflect agency problems, as they are higher for firms with poor internal corporate governance and strong managerial entrenchment. We address endogeneity concerns by using peer firms' donations as an instrument in a two-stage least squares (2SLS) setting and by conducting a difference-indifference analysis around a general election.

AbstractManuscript TypeEmpiricalResearch Question/IssueThis paper investigates whether corporate payout policies (dividends, share repurchases, a combination of dividends and share repurchases, and full earnings retention) are set by CEOs who intend to maximize their personal wealth.Research Findings/InsightsFor all listed UK companies we study whether the payout channel choice is affected by investor sentiment, taxation, major shareholder ownership, and in particular the CEO's compensation package. The payout choice has an immediate effect on the value of the CEO's stock options and restricted stock, as anticipated dividends drive down the value of his equity‐based pay (if it is not dividend‐protected), and share repurchases have a positive impact on pay. By means of a quantile regression approach and nested logit models, we find that CEOs adopt a payout policy that increases the value of their equity‐based pay.Theoretical/Academic ImplicationsTraditional research shows that corporate payout policies cater to shareholder clienteles who have preferences for specific types of payout induced by e.g. differences in taxation on dividends and capital gains, or market sentiment. We demonstrate that it is a CEO's personal wealth as reflected by his compensation package rather than shareholder preferences that has the strongest impact on the payout policy.Practitioner/Policy ImplicationsThis research encourages firms/remuneration consultants to make top management's remuneration packages 'dividend‐neutral', in other words to remove the negative impact of the dividends on pay such that the payout and payout channel choice will not be influenced by the CEO's wealth. In addition, this research encourages shareholders to contemplate whether the payout is beneficial for them and to vote on the proposed payout policy at the annual general meetings.