Social capital and managers' use of corporate resources
This study investigates how social capital affects managers’ use of corporate resources. We find that for firms located in U.S. counties with a high level of social capital, (i) corporate cash holdings have higher marginal value, (ii) the contribution of capital expenditures to shareholder value is...
VerfasserInnen: | ; ; |
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Medienart: | Elektronisch Aufsatz |
Sprache: | Englisch |
Verfügbarkeit prüfen: | HBZ Gateway |
Journals Online & Print: | |
Fernleihe: | Fernleihe für die Fachinformationsdienste |
Veröffentlicht: |
Springer Science + Business Media B. V
2021
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In: |
Journal of business ethics
Jahr: 2021, Band: 168, Heft: 3, Seiten: 593-613 |
weitere Schlagwörter: | B
Acquisitions
B Agency problem B Social Capital B Capital expenditure B Investment efficiency B Aufsatz in Zeitschrift B Cash holdings |
Online Zugang: |
Volltext (lizenzpflichtig) Volltext (lizenzpflichtig) |
Zusammenfassung: | This study investigates how social capital affects managers’ use of corporate resources. We find that for firms located in U.S. counties with a high level of social capital, (i) corporate cash holdings have higher marginal value, (ii) the contribution of capital expenditures to shareholder value is higher, and (iii) acquirers experience higher announcement-period abnormal stock returns. We further find that social capital decreases both over- and under-investment, and thus improves ex post corporate investment efficiency. Our evidence suggests that in communities with a high level of social capital, strong social norms and dense social networks constrain unethical corporate behavior, which induces more efficient use of corporate resources. |
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ISSN: | 1573-0697 |
Enthält: | Enthalten in: Journal of business ethics
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Persistent identifiers: | DOI: 10.1007/s10551-019-04223-7 |