Excess Control and Corporate Social Responsibility
Corporate social responsibility strategies depend on the ownership structure of the firm. This article examines the effect of the discrepancy between cash-flow rights and control rights (excess control) on corporate social responsibility (CSR). The analyses of a sample of French listed firms show that firms with excess control achieve significantly lower CSR performance than those without excess control. Family ownership increases the negative effect of excess control on CSR performance, while the presence of other major shareholders neutralizes this effect. Our results are robust to the use of multiple measures of excess control, CSR performance, and control for potential endogeneity issues.