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| Untersuchte Arbeit: Seite: 59, Zeilen: 1 ff. |
Quelle: Mackey et al 2007 Seite(n): 820, 830, Zeilen: 820: right col., 18 ff.; 830: left col.: 4 ff.; 11: left col.: 1 ff. |
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| Mackey, Mackey and Barney’s model
In this section they present a simple model of the supply of and demand for opportunities to invest in socially responsible firms. They use this model to describe the impact that beginning or ending socially responsible activities that reduce the present value of a firm’s cash flows will have on the firm’s market value. As is always the case, they adopt a variety of simplifying assumptions. Many of these assumptions are technical in nature and do not have an impact on the conclusions drawn from the model. Some are more substantive in nature and might have an impact on these conclusions. However, several of these substantive assumptions are relaxed, and the conclusions of the model are reexamined. While relaxing these assumptions does generate important insights, it does not affect the model’s central conclusion: the impact of socially responsible activities that reduce the present value of a firm’s cash flows on a firm’s market value depends on the supply of and demand for opportunities to invest in these types of firms. Implications and discussion The central assertion of Mackey, Mackey and Barney’s[21b, p.823,824] model is that the opportunity to invest in a firm engaging in socially responsible activities is a “product” firms sell to current and potential investors. Sometimes, current and potential equity holders may prefer to invest in firms pursuing such activities, even if those activities reduce the present value of the firms’ cash flows. The central conclusion of Mackey, Mackey and Barney is that the supply of and demand for these investment opportunities determine when socially responsible activities that reduce the present value of a firm’s cash flows will be positively or negatively related to that firm’s market value. Beyond this central assertion and conclusion, the arguments developed here have a variety of other empirical, theoretical, and practical implications. Empirical Implications Overall, the model suggests that there will be a positive correlation between firm choices about investing in socially responsible activities and firm value. This is because the model adopts the assumption that managers make these choices - to begin socially responsible activities, to cease socially responsible activities, or to maintain their current strategies whether they are socially responsible or not - in a way that maximizes the market value of a firm. Recent reviews of the empirical corporate social responsibility literature generally are consistent with this expectation although it may be suggested that the empirical results, while positive overall, are nevertheless mixed. However, the model developed here suggests that efforts to examine the “overall” correlation between socially responsible activities and firm performance may be less interesting than examining the relationship between the supply and demand conditions under which these decisions are made and a firm’s market value. Sometimes, beginning socially responsible activities will increase a firm’s market value; sometimes it will reduce its market value. Sometimes, ending socially responsible activities will decrease a firm’s market value; sometimes it will increase its market value. And, sometimes, continuing current socially responsible activities - by either continuing to invest in these activities or continuing to not invest in these activities – will increase a firm’s market value; sometimes it will decrease a firm’s market value. Only by examining the supply of and demand for socially responsible investment opportunities at the time these decisions are made can the relationship between a firm’s social responsibility strategies and its market value be understood. Of course, it will often be difficult to directly measure the supply of and demand for socially responsible investment opportunities. However, it may be possible to develop surrogate measures of these concepts. For example, changes in the number of firms who score high on various aggregate measures of social responsibility might indicate changes in the supply of so[cially responsible investment opportunities.] |
THE MODEL
In this section we present a simple model of the supply of and demand for opportunities to invest in socially responsible firms. We use this model to describe the impact that beginning or ending socially responsible activities that reduce the present value of a firm’s cash flows will have on the firm’s market value. As is always the case, we adopt a variety of simplifying assumptions. Many of these assumptions are technical in nature and do not have an impact on the conclusions drawn from the model. Some are more substantive in nature and might have an impact on these conclusions. However, later in the paper, several of these substantive assumptions are relaxed, and the conclusions of the model are reexamined. While relaxing these assumptions does generate important insights, it does not affect the model’s central conclusion: the impact of socially responsible activities that reduce the present value of a firm’s cash flows on a firm’s market value depends on the supply of and demand for opportunities to invest in these types of firms. [page 830:] IMPLICATIONS AND DISCUSSION The central assertion of this paper is that the opportunity to invest in a firm engaging in socially responsible activities is a “product” firms sell to current and potential investors. Sometimes, current and potential equity holders may prefer to invest in firms pursuing such activities, even if those activities reduce the present value of the firms’ cash flows. The central conclusion of this paper is that the supply of and demand for these investment opportunities determine when socially responsible activities that reduce the present value of a firm’s cash flows will be positively or negatively related to that firm’s market value. Beyond this central assertion and conclusion, the arguments developed here have a variety of other empirical, theoretical, and practical implications. We examine some of these other implications below.11 Empirical Implications Overall, the model suggests that there will be a positive correlation between firm choices about investing in socially responsible activities and firm value. This is because the model adopts the assumption that managers make these choices — to begin socially responsible activities, to cease socially responsible activities, or to maintain their current strategies whether they are socially responsible or not — in a way that maximizes the market value of a firm. Recent reviews of the empirical corporate social responsibility literature generally are consistent with this expectation (Orlitzky et al., 2003), although Margolis and Walsh (2003) suggest that the empirical results, while positive overall, are nevertheless mixed.13 However, the model developed here suggests that efforts to examine the “overall” correlation between socially responsible activities and firm performance may be less interesting than examining the relationship between the supply and demand conditions under which these decisions are made and a firm’s market value. Sometimes, beginning socially responsible activities will increase a firm’s market value; sometimes it will reduce its market value. Sometimes, ending socially responsible activities will decrease a firm’s market value; sometimes it will increase its market value. And, sometimes, continuing current socially responsible activities — by either continuing to invest in these activities or continuing to not invest in these activities — will increase a firm’s market value; sometimes it will decrease a firm’s market value. Only by examining the supply of and demand for socially responsible investment opportunities at the time these decisions are made can the relationship between a firm’s social responsibility strategies and its market value be understood. Of course, it will often be difficult to directly measure the supply of and demand for socially responsible investment opportunities. However, it may be possible to develop surrogate measures of these concepts. For example, changes in the number of firms who score high on various aggregate measures of social responsibility might indicate changes in the supply of socially responsible investment opportunities. |
The source is mentioned at the beginning of the page. The author appears to summarise or paraphrase some of the source's findings. The reader would not expect this to be taken verbatim from the source. |
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