Corporate social responsibility and insider horizon

Shackleton, Mark and Yao, Chelsea and Zuo, Ziran (2025) Corporate social responsibility and insider horizon. Journal of Corporate Finance, 90: 102696. ISSN 0929-1199

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Abstract

We show a positive relation between insider horizon and a firm's corporate social responsibility (CSR) performance. This positive relation is likely driven by good internal governance rather than agency problems. To support a causal interpretation, we adopt managerial career horizon reductions and the rejection of inevitable disclosure doctrine as exogenous shocks to insider horizon. We find that the observed positive effects are stronger when firms have higher ownership of long-term and socially responsible institutional investors, when insiders sign long-term compensation contracts, and when firms face less takeover pressure. We document the real effects of long-horizon insiders using various raw CSR metrics. Overall, our results indicate that insiders' long-term orientation can promote CSR.