The impact of ownership structure on corporate social responsibility: the moderating role of financial performance

Abstract

Purpose The purpose of this paper is to investigate the relationship between ownership structure and corporate social responsibility (CSR). Specifically, this paper examines the impact of financial performance on the relationship between ownership structure and CSR. Design/methodology/approach This study uses panel data set of 200 French firms listed during 2007–2018 period. The direct and moderating effects were tested by using multiple regression technique. Findings The results indicate that investors have different attitudes toward CSR engagement. While institutional ownership affects positively CSR engagement, managerial ownership shows a negative effect. Findings also show that financial performance accentuates these effects. Research limitations/implications The findings have practical implications that may be useful to regulators and managers interested in enhancing CSR. For regulators, the results advise policymakers to restrict managerial ownership and promote institutional investments to improve CSR. For managers, the results suggest developing more sophisticated intervention mechanisms to deal with conflicting voices that could result from different owners’ attitudes toward CSR. As an extension to this research, further study can examine the impact of audit quality on CSR. Originality/value This study proposes the establishment of dynamic links between ownership structure and CSR around firm financial performance. In addition, it investigates not only the overall CSR ratings but also each of CSR pillars, namely, environmental, social and governance.