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The Effect of Ownership Structure on Corporate Social Responsibility: Empirical Evidence from Korea

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Abstract

Relatively little research has examined the effects of ownership on the firms’ corporate social responsibility (CSR). In addition, most of it has been conducted in the Western context such as the U.S. and Europe. Using a sample of 118 large Korean firms, we hypothesize that different types of shareholders will have distinct motivations toward the firm’s CSR engagement. We break down ownership into different groups of shareholders: institutional, managerial, and foreign ownerships. Results indicate a significant, positive relationship between CSR ratings and ownership by institutions and foreign investors. In contrast, shareholding by top managers is negatively associated with firm’s CSR rating while outside director ownership is not significant. We conclude that different owners have differential impacts on the firm’s CSR engagement.

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Notes

  1. KLD ratings consist of multiple sub-domains: Environment, Community, Diversity, Employee Relations, Human Rights, Product Quality and Safety, and Corporate Governance.

  2. Although the results of two 2SLS regressions are not reported here due to identical findings with our OLS regression models, additional results are available from the authors upon request.

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  1. School of Business, University of Kansas, 1300 Sunnyside Avenue, Lawrence, KS, 66045, USA

    Won Yong Oh, Young Kyun Chang & Aleksey Martynov

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  1. Won Yong Oh
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Correspondence to Won Yong Oh.

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Oh, W.Y., Chang, Y.K. & Martynov, A. The Effect of Ownership Structure on Corporate Social Responsibility: Empirical Evidence from Korea. J Bus Ethics 104, 283–297 (2011). https://doi.org/10.1007/s10551-011-0912-z

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