ESG controversies, corporate governance, and the market for corporate control

References

• Amihud, Y., and S. Stoyanov. 2017. Do staggered boards harm shareholders? Journal of Financial Economics 123, no. 2: 432–439. doi:10.1016/j.jfineco.2016.04.002.
   Web of Science ®Google Scholar
• Anderson, R.C., and D.M. Reeb. 2004. Board composition: Balancing family influence in S&P 500 firms. Administrative Science Quarterly 49, no. 2: 209–237. doi:10.2307/4131472.
   Web of Science ®Google Scholar
• Aouadi, A., and S. Marsat. 2018. Do ESG controversies matter for firm value? evidence from international data. Journal of Business Ethics 151, no. 4: 1027–1047. doi:10.1007/s10551-016-3213-8.
   Web of Science ®Google Scholar
• Archel, P., J. Husillos, C. Larrinaga, and C. Spence. 2009. Social disclosure, legitimacy theory and the role of the state. Accounting, Auditing & Accountability Journal 22, no. 8: 1284–1307. doi:10.1108/09513570910999319.
   Google Scholar
• Bagwell, L.S. 1991. Share repurchase and takeover deterrence. The Rand Journal of Economics 22, no. 1: 72–88. doi:10.2307/2601008.
   Web of Science ®Google Scholar
• Balima, H.W. 2020. Coups d’état and the cost of debt. Journal of Comparative Economics 48, no. 3: 509–528. doi:10.1016/j.jce.2020.04.001.
   Web of Science ®Google Scholar
• Bebchuk, L.A., and L.A. Stole. 1993. Do short-term objectives lead to under- or overinvestment in long-term projects? The Journal of Finance 48, no. 2: 719. doi:10.2307/2328920.
   Web of Science ®Google Scholar
• Bendickson, J., J. Muldoon, E. Liguori, and P.E. Davis. 2016. Agency theory: The times, they are a-changin’. Management Decision 54, no. 1: 174–193. doi:10.1108/MD-02-2015-0058.
   Web of Science ®Google Scholar
• Bertrand, M., and S. Mullainathan. 2003. Enjoying the quiet life? corporate governance and managerial preferences. Journal of Political Economy 111, no. 5: 1043–1075. doi:10.1086/376950.
   Web of Science ®Google Scholar
• Bhojraj, S., and R. Libby. 2005. Capital market pressure, disclosure frequency-induced earnings/cash flow conflict, and managerial myopia (retracted). The Accounting Review 80, no. 1: 1–20. doi:10.2308/accr.2005.80.1.1.
   Web of Science ®Google Scholar
• Bol, D., M. Giani, A. Blais, and P.J. Loewen. 2020. The effect of COVID-19 lockdowns on political support: Some good news for democracy? European Journal of Political Research 60, no. 2: 497–505. doi:10.1111/1475-6765.12401.
   Web of Science ®Google Scholar
• Bosse, D.A., and R.A. Phillips. 2016. Agency theory and bounded self-interest. Academy of Management Review 41, no. 2: 276–297. doi:10.5465/amr.2013.0420.
   Web of Science ®Google Scholar
• Cain, M.D., S.B. McKeon, and S.D. Solomon. 2017. Do takeover laws matter? Evidence from five decades of hostile takeovers. Journal of Financial Economics 124, no. 3: 464–485. doi:10.1016/j.jfineco.2017.04.003.
   Web of Science ®Google Scholar
• Chaivisuttangkun, S., and P. Jiraporn. 2021. The effect of co-opted directors on firm risk during a stressful time: Evidence from the financial crisis. Finance Research Letters 39: 101538. doi:10.1016/j.frl.2020.101538.
   Web of Science ®Google Scholar
• Chatjuthamard, P., P. Jiraporn, S.M. Lee, A. Uyar, and M. Kilic. 2021. Does board gender diversity matter? Evidence from hostile takeover vulnerability. Corporate Governance: The International Journal of Business in Society 21, no. 5: 845–864. doi:10.1108/CG-08-2020-0353.
   Web of Science ®Google Scholar
• Chatjuthamard, P., V. Ongsakul, and P. Jiraporn. 2021. Corporate complexity, managerial myopia, and hostile takeover exposure: Evidence from textual analysis. SSRN Electronic Journal. doi:10.2139/ssrn.3957648.
   Google Scholar
• Chintrakarn, P., P. Jiraporn, N. Jiraporn, and T. Davidson. 2017. Estimating the effect of corporate social responsibility on firm value using geographic identification. Asia-Pacific Journal of Financial Studies 46, no. 2: 276–304. doi:10.1111/ajfs.12170.
   Web of Science ®Google Scholar
• Chintrakarn, P., P. Jiraporn, J.C. Kim, and Y.S. Kim. 2016. The effect of corporate governance on corporate social responsibility. Asia-Pacific Journal of Financial Studies 45, no. 1: 102–123. doi:10.1111/ajfs.12121.
   Web of Science ®Google Scholar
• Chintrakarn, P., P. Jiraporn, S. Tong, and P. Chatjuthamard. 2015. Estimating the effect of entrenched boards on firm value using geographic identification. Finance Research Letters 12: 109–116. doi:10.1016/j.frl.2014.11.002.
   Web of Science ®Google Scholar
• Chintrakarn, P., P. Jiraporn, S. Tong, N. Jiraporn, and R. Proctor. 2020. How do independent directors view corporate social responsibility (CSR)? Evidence from a quasi-natural experiment. Financial Review 55, no. 4: 697–716. doi:10.1111/fire.12244.
   Web of Science ®Google Scholar
• Chintrakarn, P., P. Jiraporn, and S. Treepongkaruna. 2021. How do independent directors view corporate social responsibility (CSR) during a stressful time? Evidence from the financial crisis. International Review of Economics & Finance 71: 143–160. doi:10.1016/j.iref.2020.08.007.
   Web of Science ®Google Scholar
• Cooper, M., A.M. Knott, and W. Yang. 2021. Rq innovative efficiency and firm value. Journal of Financial and Quantitative Analysis 57, no. 5: 1649–1694. doi:10.1017/s0022109021000417.
   Web of Science ®Google Scholar
• Cremers, K.J.M., L.P. Litov, and S.M. Sepe. 2017. Staggered boards and long-term firm value, revisited. Journal of Financial Economics 126, no. 2: 422–444. doi:10.1016/j.jfineco.2017.08.003.
   Web of Science ®Google Scholar
• DasGupta, R. 2021. Financial performance shortfall, ESG controversies, and ESG performance: Evidence from firms around the world. Finance Research Letters 46: 102487. doi:10.1016/j.frl.2021.102487.
   Web of Science ®Google Scholar
• Deegan, C.M. 2019. Legitimacy theory. Accounting, Auditing & Accountability Journal, (ahead-of-print). doi:10.1108/aaaj-08-2018-3638.
   Google Scholar
• de Franco, C. 2020. Esg controversies and their impact on performance. The Journal of Investing 29, no. 2: 33–45. doi:10.3905/joi.2019.1.106.
   Web of Science ®Google Scholar
• Dewenter, K., and P.E. Malatesta. 2001. State-owned and privately owned firms: An empirical analysis of profitability, leverage, and labor intensity. American Economic Review 91, no. 1: 320–334.
   Web of Science ®Google Scholar
• Donaldson, T., and L.E. Preston. 1995. The stakeholder theory of the corporation: Concepts, evidence, and implications. The Academy of Management Review 20, no. 1: 65–91. doi:10.2307/258887.
   Web of Science ®Google Scholar
• Dorfleitner, G., C. Kreuzer, and C. Sparrer. 2020. ESG controversies and controversial ESG: About silent saints and small sinners. Journal of Asset Management 21, no. 5: 393–412. doi:10.1057/s41260-020-00178-x.
   Web of Science ®Google Scholar
• Du, S., C. Bhattacharya, and S. Sen. 2010. Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews 12, no. 1: 8–19. doi:10.1111/j.1468-2370.2009.00276.x.
   Web of Science ®Google Scholar
• Fama, E.F. 1980. Agency problems and the theory of the firm. Journal of Political Economy 88, no. 2: 288–307. doi:10.1086/260866.
   Web of Science ®Google Scholar
• Fama, E.F., and M.C. Jensen. 1983. Agency problems and residual claims. The Journal of Law and Economics 26, no. 2: 327–349. doi:10.1086/467038.
   Web of Science ®Google Scholar
• Freeman, R.E. 1999. Divergent stakeholder theory. Academy of Management Review 24, no. 2: 233–236. doi:10.5465/amr.1999.1893932.
   Web of Science ®Google Scholar
• Freier, R., M. Schumann, and T. Siedler. 2015. The earnings returns to graduating with honors — Evidence from law graduates. Labour Economics 34: 39–50. doi:10.1016/j.labeco.2015.03.001.
   Web of Science ®Google Scholar
• Friedman, A.L., and S. Miles. 2002. Developing stakeholder theory. Journal of Management Studies 39, no. 1: 1–21. doi:10.1111/1467-6486.00280.
   Web of Science ®Google Scholar
• Frooman, J. 1997. Socially irresponsible and illegal behavior and shareholder wealth. Business & Society 36, no. 3: 221–249. doi:10.1177/000765039703600302.
   Google Scholar
• Garvey, G.T., and G. Hanka. 1999. Capital structure and corporate control: The effect of antitakeover statutes on firm leverage. The Journal of Finance 54, no. 2: 519–546. doi:10.1111/0022-1082.00116.
   Web of Science ®Google Scholar
• Glendening, M., E.G. Mauldin, and K.W. Shaw. 2019. Determinants and consequences of quantitative critical accounting estimate disclosures. The Accounting Review 94, no. 5: 189–218. doi:10.2308/accr-52368.
   Web of Science ®Google Scholar
• Godfrey, P.C., C.B. Merrill, and J.M. Hansen. 2009. The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal 30, no. 4: 425–445. doi:10.1002/smj.750.
   Web of Science ®Google Scholar
• Graham, J.R., C.R. Harvey, and S. Rajgopal. 2005. The economic implications of corporate financial reporting. Journal of Accounting and Economics 40, no. 1–3: 3–73. doi:10.1016/j.jacceco.2005.01.002.
   Web of Science ®Google Scholar
• Guthrie, J., and L.D. Parker. 1989. Corporate social reporting: A rebuttal of legitimacy theory. Accounting and Business Research 19, no. 76: 343–352. doi:10.1080/00014788.1989.9728863.
   Google Scholar
• Hainmueller, J. 2012. Entropy balancing for causal effects: A multivariate reweighting method to produce balanced samples in observational studies. Political Analysis 20, no. 1: 25–46. doi:10.1093/pan/mpr025.
   Web of Science ®Google Scholar
• Haque, F., and C.G. Ntim. 2020. Executive compensation, sustainable compensation policy, carbon performance and market value. British Journal of Management 31, no. 3: 525–546. doi:10.1111/1467-8551.12395.
   Web of Science ®Google Scholar
• Jain, T., and D. Jamali. 2016. Looking inside the black Box: The effect of corporate governance on corporate social responsibility. Corporate Governance: An International Review 24, no. 3: 253–273. doi:10.1111/corg.12154.
   Web of Science ®Google Scholar
• Jensen, M.C., and W.H. Meckling. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3, no. 4: 305–360. doi:10.1016/0304-405X(76)90026-X.
   Web of Science ®Google Scholar
• Jiraporn, P., P. Chintrakarn, J.C. Kim, and Y. Liu. 2012. Exploring the agency cost of debt: Evidence from the ISS governance standards. Journal of Financial Services Research 44, no. 2: 205–227. doi:10.1007/s10693-012-0142-2.
   Web of Science ®Google Scholar
• Jiraporn, P., N. Jiraporn, A. Boeprasert, and K. Chang. 2014. Does corporate social responsibility (CSR) improve credit ratings? evidence from geographic identification. Financial Management 43, no. 3: 505–531. doi:10.1111/fima.12044.
   Web of Science ®Google Scholar
• Jiraporn, P., and S.M. Lee. 2017. How do Independent Directors Influence Corporate Risk-Taking? Evidence from a Quasi-Natural Experiment. International Review of Finance 18, no. 3: 507–519. doi:10.1111/irfi.12144.
   Web of Science ®Google Scholar
• Jiraporn, P., and Y. Liu. 2008. Capital structure, staggered boards, and firm value. Financial Analysts Journal 64, no. 1: 49–60. doi:10.2469/faj.v64.n1.7.
   Web of Science ®Google Scholar
• Jo, H., and M.A. Harjoto. 2012. The causal effect of corporate governance on corporate social responsibility. Journal of Business Ethics 106, no. 1: 53–72. doi:10.1007/s10551-011-1052-1.
   Web of Science ®Google Scholar
• Jones, T.M., and A.C. Wicks. 1999. Convergent stakeholder theory. The Academy of Management Review 24, no. 2: 206–221. doi:10.2307/259075.
   Web of Science ®Google Scholar
• Kacperczyk, A. 2009. With greater power comes greater responsibility? takeover protection and corporate attention to stakeholders. Strategic Management Journal 30, no. 3: 261–285. doi:10.1002/smj.733.
   Web of Science ®Google Scholar
• Kang, J., J. Luo, and H.S. Na. 2018. Are institutional investors with multiple blockholdings effective monitors? Journal of Financial Economics 128: 576–602.
   Web of Science ®Google Scholar
• Karpoff, J.M., and P.H. Malatesta. 1989. The wealth effects of second-generation state takeover legislation. Journal of Financial Economics 25, no. 2: 291–322. doi:10.1016/0304-405X(89)90085-8.
   Web of Science ®Google Scholar
• Klassen, R.D., and C.P. McLaughlin. 1996. The impact of environmental management on firm performance. Management Science 42, no. 8: 1199–1214. doi:10.1287/mnsc.42.8.1199.
   Web of Science ®Google Scholar
• Kyaw, K., P. Chindasombatcharoen, P. Jiraporn, and S. Treepongkaruna. 2020. Do co-opted boards strategically choose LGBT-supportive policies? International Review of Financial Analysis 73: 101651. doi:10.1016/j.irfa.2020.101651.
   Web of Science ®Google Scholar
• Kyaw, K., S. Thomsen, and S. Treepongkaruna. 2022. Firms’ potential for economic sustainability and firm value: The moderating role of blockholders. Sustainable Development 30, no. 5: 884–901. doi:10.1002/sd.2287.
   Web of Science ®Google Scholar
• Laplume, A.O., K. Sonpar, and R.A. Litz. 2008. Stakeholder theory: Reviewing a theory that moves US. Journal of Management 34, no. 6: 1152–1189. doi:10.1177/0149206308324322.
   Web of Science ®Google Scholar
• Laverty, K.J. 1996. Economic “short-termism”: The debate, The unresolved issues, and The implications for management practice and research. Academy of Management Review 21, no. 3: 825–860. doi:10.5465/amr.1996.9702100316.
   Web of Science ®Google Scholar
• Laverty, K.J. 2004. Managerial myopia or systemic short-termism? Management Decision 42, no. 8: 949–962. doi:10.1108/00251740410555443.
   Google Scholar
• Lee, S.M., P. Jiraporn, Y.S. Kim, and K.J. Park. 2021. Do co-opted directors influence corporate risk-taking and credit ratings? The Quarterly Review of Economics and Finance 79: 330–344. doi:10.1016/j.qref.2020.07.003.
   Web of Science ®Google Scholar
• Lel, U., and D.P. Miller. 2015. Does takeover activity cause managerial discipline? evidence from international M&A laws. The Review of Financial Studies 28, no. 6: 1588–1622. doi:10.1093/rfs/hhv002.
   Web of Science ®Google Scholar
• Lennox, C.S., J.R. Francis, and Z. Wang. 2011. Selection models in accounting research. The Accounting Review 87, no. 2: 589–616. doi:10.2308/accr-10195.
   Web of Science ®Google Scholar
• Low, A. 2009. Managerial risk-taking behavior and equity-based compensation⋆. Journal of Financial Economics 92, no. 3: 470–490. doi:10.1016/j.jfineco.2008.05.004.
   Web of Science ®Google Scholar
• Luft Mobus, J. 2005. Mandatory environmental disclosures in a legitimacy theory context. Accounting, Auditing & Accountability Journal 18, no. 4: 492–517. doi:10.1108/09513570510609333.
   Google Scholar
• Lundstrum, L.L. 2002. Corporate investment myopia: A horserace of the theories. Journal of Corporate Finance 8, no. 4: 353–371. doi:10.1016/S0929-1199(01)00050-5.
   Web of Science ®Google Scholar
• Luo, H. 2021. How ESG controversies impact a company. https://www.senecaesg.com/insights/how-esg-controversies-impact-a-company-part-1/.
   Google Scholar
• Maignan, I., and D.A. Ralston. 2002. Corporate social responsibility in Europe and the U.S.: Insights from businesses’ self-presentations. Journal of International Business Studies 33, no. 3: 497–514. doi:10.1057/palgrave.jibs.8491028.
   Web of Science ®Google Scholar
• Manne, H.G. 1965. Mergers and the market for corporate control. Journal of Political Economy 73, no. 4: 351. doi:10.1086/259036.
   Google Scholar
• Marcus, J. 2013. The effect of unemployment on the mental health of spouses – Evidence from plant closures in Germany. Journal of Health Economics 32, no. 3: 546–558. doi:10.1016/j.jhealeco.2013.02.004.
   PubMed Web of Science ®Google Scholar
• Maung, M., Z. Tang, C. Wilson, and X. Xu. 2021. Religion, risk aversion, and cross border mergers and acquisitions. Journal of International Financial Markets, Institutions and Money 70: 101262. doi:10.1016/j.intfin.2020.101262.
   Web of Science ®Google Scholar
• McMullin, J.L., and B. Schonberger. 2020. Entropy-balanced accruals. Review of Accounting Studies 25, no. 1: 84–119. doi:10.1007/s11142-019-09525-9.
   Web of Science ®Google Scholar
• Mizik, N. 2010. The theory and practice of myopic management. Journal of Marketing Research 47, no. 4: 594–611. doi:10.1509/jmkr.47.4.594.
   Web of Science ®Google Scholar
• Narayanan, M.P. 1985. Managerial incentives for short-term results. The Journal of Finance 40, no. 5: 1469–1484. doi:10.1111/j.1540-6261.1985.tb02395.x.
   Web of Science ®Google Scholar
• Neuenkirch, M., and F. Neumeier. 2016. The impact of US sanctions on poverty. Journal of Development Economics 121: 110–119. doi:10.1016/j.jdeveco.2016.03.005.
   Web of Science ®Google Scholar
• Neuenkirch, M., and P. Tillmann. 2016. Does a good central banker make a difference? Economic Inquiry 54, no. 3: 1541–1560. doi:10.1111/ecin.12326.
   Web of Science ®Google Scholar
• Nissim, D. 2019. EBITDA, EBITA, or EBIT? Columbia Business School Research Paper 17–71.
   Google Scholar
• Nyberg, A.J., I.S. Fulmer, B. Gerhart, and M.A. Carpenter. 2010. Agency theory revisited: CEO return and shareholder interest alignment. Academy of Management Journal 53, no. 5: 1029–1049. doi:10.5465/amj.2010.54533188.
   Web of Science ®Google Scholar
• O’Donovan, G. 2002. Environmental disclosures in the annual report. Accounting, Auditing & Accountability Journal 15, no. 3: 344–371. doi:10.1108/09513570210435870.
   Google Scholar
• Ongsakul, V., P. Chatjuthamard, P. Jiraporn, and S. Chaivisuttangkun. 2021. Corporate integrity and hostile takeover threats: Evidence from machine learning and “CEO luck”. Journal of Behavioral and Experimental Finance 32: 100579. doi:10.1016/j.jbef.2021.100579.
   Web of Science ®Google Scholar
• Ongsakul, V., P. Chatjuthamard, N. Jiraporn, and P. Jiraporn. 2020. Does the market for corporate control influence executive risk-taking incentives? Evidence from takeover vulnerability. Corporate Governance: The International Journal of Business in Society 21, no. 1: 62–77. doi:10.1108/CG-03-2020-0106.
   Web of Science ®Google Scholar
• Palazzo, G., and A.G. Scherer. 2006. Corporate legitimacy as deliberation: A communicative framework. Journal of Business Ethics 66, no. 1: 71–88. doi:10.1007/s10551-006-9044-2.
   Web of Science ®Google Scholar
• Pepper, A., and J. Gore. 2012. Behavioral agency theory. Journal of Management 41, no. 4: 1045–1068. doi:10.1177/0149206312461054.
   Google Scholar
• Pesqueux, Y., and S. Damak-Ayadi. 2005. Stakeholder theory in perspective. Corporate Governance: The International Journal of Business in Society 5, no. 2: 5–21. doi:10.1108/14720700510562622.
   Google Scholar
• Phillips, R., R.E. Freeman, and A.C. Wicks. 2003. What stakeholder theory is Not. Business Ethics Quarterly 13, no. 4: 479–502. doi:10.5840/beq200313434.
   Web of Science ®Google Scholar
• Pirinsky, C., and Q. Wang. 2006. Does corporate headquarters location matter for stock returns? The Journal of Finance 61, no. 4: 1991–2015. doi:10.1111/j.1540-6261.2006.00895.x.
   Web of Science ®Google Scholar
• Rosenbaum, P.R., and D.B. Rubin. 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70, no. 1: 41–55. doi:10.1093/biomet/70.1.41.
   Web of Science ®Google Scholar
• Schuster, C.L., A.T. Nicolai, and J.G. Covin. 2018. Are founder-Led firms less susceptible to managerial myopia? Entrepreneurship Theory and Practice 44, no. 3: 391–421. doi:10.1177/1042258718806627.
   Web of Science ®Google Scholar
• Schwert, G.W. 2000. Hostility in takeovers: In the eyes of the beholder? The Journal of Finance 55, no. 6: 2599–2640. doi:10.1111/0022-1082.00301.
   Web of Science ®Google Scholar
• Shakil, M.H. 2021. Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity. Resources Policy 72: 102144. doi:10.1016/j.resourpol.2021.102144.
   Web of Science ®Google Scholar
• Suchman, M.C. 1995. Managing legitimacy: Strategic and institutional approaches. The Academy of Management Review 20, no. 3: 571–610. doi:10.2307/258788.
   Web of Science ®Google Scholar
• Tate, W.L., L.M. Ellram, L. Bals, E. Hartmann, and W. van der Valk. 2010. An Agency Theory perspective on the purchase of marketing services. Industrial Marketing Management 39, no. 5: 806–819. doi:10.1016/j.indmarman.2009.08.005.
   Web of Science ®Google Scholar
• Treepongkaruna, S., K. Kyaw, and P. Jiraporn. 2022. Shareholder litigation rights and ESG controversies: A quasi-natural experiment. International Review of Financial Analysis 84: 102396.
   Web of Science ®Google Scholar
• Treepongkaruna, S., K. Kyaw, and P. Jiraporn. 2024. ESG controversies and corporate governance: Evidence from board size. Business Strategy and the Environment, January: 1–15. doi:10.1002/bse.3697.
   Web of Science ®Google Scholar
• Truex, R. 2014. The returns to office in a “rubber stamp” parliament. American Political Science Review 108, no. 2: 235–251. doi:10.1017/S0003055414000112.
   Web of Science ®Google Scholar
• Weir, C., D. Laing, and P.J. McKnight. 2002. Internal and external governance mechanisms: Their impact on the performance of Large UK public companies. Journal of Business Finance & Accounting 29, no. 5: 579–611. doi:10.1111/1468-5957.00444.
   Google Scholar
• Wilde, J.H. 2017. The deterrent effect of employee whistleblowing on firms’ financial misreporting and Tax aggressiveness. The Accounting Review 92, no. 5: 247–280. doi:10.2308/accr-51661.
   Web of Science ®Google Scholar
• Wilmshurst, T.D., and G.R. Frost. 2000. Corporate environmental reporting. Accounting, Auditing & Accountability Journal 13, no. 1: 10–26. doi:10.1108/09513570010316126.
   Google Scholar
• Zeli, A., and P. Mariani. 2009. Productivity and profitability analysis of large Italian companies: 1998-2002. International Review of Economics 56: 175–188.
   Google Scholar
• Zhu, S., J. Du, J. Lu, and Q. Zheng. 2023. How does foreign acquirers’ ESG misbehaviour exposure affect the completion of cross-border acquisitions? British Journal of Management, https://doi.org/10.1111/1467-8551.127.
   Web of Science ®Google Scholar