TY - JOUR
T1 - CSR variability, managerial risk aversion, and hostile takeover threats
AU - Likitapiwat, Takakorn
AU - Treepongkaruna, Sirimon
AU - Jiraporn, Pornsit
N1 - Funding Information:
Open access publishing facilitated by The University of Western Australia, as part of the Wiley - The University of Western Australia agreement via the Council of Australian University Librarians.
Funding Information:
This project is funded by National Research Council of Thailand (NRCT): N42A640326.
Publisher Copyright:
© 2022 The Authors. Corporate Social Responsibility and Environmental Management published by ERP Environment and John Wiley & Sons Ltd.
PY - 2023/3
Y1 - 2023/3
N2 - The quiet life hypothesis argues that, when managers are insulated from the discipline of the takeover market, they tend to be less ambitious, avoiding risky and complex investments that require more managerial time and efforts. In other words, they prefer to live a “quiet life.” Exploiting a distinctive measure of takeover vulnerability principally based on the staggered passage of state legislations, we investigate the quiet life hypothesis using corporate social performance. Our results show that more takeover exposure significantly raises CSR variability, consistent with the prediction of the quiet life hypothesis, where managers adopt riskier CSR strategies and investments when they are more exposed to takeover threats, resulting in higher CSR volatility. Specifically, an increase in takeover exposure by one standard deviation raises CSR variability by 5.23%–6.73%. Additional analysis corroborates the results, including propensity score matching, instrumental-variable analysis, Lewbel's heteroscedastic identification, and entropy balancing.
AB - The quiet life hypothesis argues that, when managers are insulated from the discipline of the takeover market, they tend to be less ambitious, avoiding risky and complex investments that require more managerial time and efforts. In other words, they prefer to live a “quiet life.” Exploiting a distinctive measure of takeover vulnerability principally based on the staggered passage of state legislations, we investigate the quiet life hypothesis using corporate social performance. Our results show that more takeover exposure significantly raises CSR variability, consistent with the prediction of the quiet life hypothesis, where managers adopt riskier CSR strategies and investments when they are more exposed to takeover threats, resulting in higher CSR volatility. Specifically, an increase in takeover exposure by one standard deviation raises CSR variability by 5.23%–6.73%. Additional analysis corroborates the results, including propensity score matching, instrumental-variable analysis, Lewbel's heteroscedastic identification, and entropy balancing.
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U2 - 10.1002/csr.2387
DO - 10.1002/csr.2387
M3 - Article
AN - SCOPUS:85139218691
SN - 1535-3958
VL - 30
SP - 773
EP - 790
JO - Corporate Social Responsibility and Environmental Management
JF - Corporate Social Responsibility and Environmental Management
IS - 2
ER -