Family Control and Corporate Social Responsibility: Evidence from East Asia

Abstract

This paper investigates the impact of family control on corporate social responsibility (CSR) performance. Using Carney and Child's (2013) newly collected data on the ultimate ownership structure of publicly traded firms in nine East Asia economies, we find that family control has a significantly negative impact on CSR performance, which is consistent with the entrenchment view of family ownership. Also, we find that the presence of multiple large shareholders helps to improve the CSR performance of family firms. Moreover, our results are robust to inclusion of other types of ownership, different CSR components, endogeneity tests, subsample tests, alternative estimation methods, and alternative definition of family firms. Our study contributes to our understanding of the corporate governance of family-controlled firms and the determinants of CSR.