Cheng, Hong, and Shue (2019)

Cheng, Ing-Haw, Harrison Hong, and Kelly Shue. “Do Managers Do Good With Other People’s Money?” Working paper (Dartmouth, Tuck School of Business), September 11, 2019.

From the authors’ abstract: “We show that firm social responsibility scores (ESG), generally attributed to pecuniary motives, are also driven by non-pecuniary considerations. We find that close passage of shareholder-rights proposals leads to lower ESG, consistent with the oft-discussed agency channel. We then show that dividend taxes play an under-appreciated role in driving ESG since these taxes have both agency and delegated-giving-as-tax-avoidance effects. The 2003 Dividend Tax Cut, which should have non-negative effects on ESG based on pecuniary considerations, is instead associated with a decline in ESG.”

LK comment: Long-running project, w/ first working paper posted to SSRN in 2011.

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1962120