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Typus
BauernOpfer
Bearbeiter
SleepyHollow02
Gesichtet
Yes.png
Untersuchte Arbeit:
Seite: 60, Zeilen: 1 ff.
Quelle: Mackey et al 2007
Seite(n): 830-831, Zeilen: 830: right col.: 30 ff; 831: left column, 1ff
[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. Also, changes in the total dollars invested in socially responsible mutual funds as a percentage of the total dollars invested in all mutual funds might be an indicator of changes in total demand for socially responsible investment opportunities. Public opinion polls on the importance of various social issues in an economy might also provide some indication of the level of demand for socially responsible investment opportunities. Whatever measures are ultimately developed, the model presented here suggests that understanding the relationship between the supply of and demand for socially responsible investment opportunities is central to understanding the relationship between socially responsible activities and firm performance, at least as measured by a firm’s market value.

Theoretical Implications

The model also has a variety of theoretical implications, both for the study of firm value more broadly and for the study of the relationship between corporate social responsibility and firm value.

Decoupling cash flow and firm market value.

Traditional financial logic suggests that firms maximize their market value by maximizing the present value of their cash flows. This link between a firm’s market value and the present value of its cash flows is based on the often unstated assumption that all of a firm’s equity holders have the same interests: to see their wealth maximized in making their investment decisions. However, by recognizing that some equity holders may sometimes have interests besides simply maximizing their wealth in making their investment decisions, we decouple “maximizing a firm’s market value” from “maximizing the present value of a firm’s cash flows.” Here, a firm’s market value is determined by the supply of and demand for the kind of investment opportunities created by the firm’s strategies - in this case, the opportunity to invest in firms implementing different corporate social responsibility strategies. In fact, there is some reason to believe that at least some current and potential equity investors may be willing to sacrifice some of their wealth-maximizing interests to invest in firms pursuing socially responsible activities. For example, there continues to be significant and steady demand for mutual funds that specialize in investing in firms that meet certain corporate social responsibility criteria. Indeed, in 2003 about one out of every ten dollars under professional management in the United States was invested in these kinds of mutual funds. Moreover, those who invest in these funds often pay a financial penalty for doing so. This penalty can be as high as 3.5 percent for actively managed socially responsible mutual funds. Thus, at least some investors are apparently willing to invest in firms that engage in socially responsible activities even though these investments may generate lower returns than investments without regard to a firm’s socially responsible activities. It is this demand for opportunities to invest in socially responsible firms, and its relationship to the supply of these investment opportunities, that determines the market value of a firm. Thus, even though the present value of the cash flows generated by socially responsible firms may suffer, the market value of these firms can still increase.

Managerial values and socially responsible investments.

This analysis also has implications for the study of the relationship between senior managers and socially responsible activities. In particular, it suggests that senior managers do not have to have particularly strong or unusual moral or value-based commitments to lead their firms to engage in socially responsible activities that reduce the present value of their cash flows. Rather, as long as demand for socially responsible investment opportunities is greater than supply, managers looking to maximize the market value of their firm will find it in their self-interest to make such investments. Managerial or corporate altruism is not required to explain why firms may sometimes make these kinds of investments. Indeed, throughout this paper we [adopt the standard economic assumption that firms are trying to maximize their market value.]

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. Also, changes in the total dollars invested in socially responsible mutual funds as a percentage of the total dollars invested in all mutual funds might be an indicator of changes in total demand for socially responsible investment opportunities. Public opinion polls on the importance of various social issues in an economy might also provide some indication of the level of demand for socially responsible investment opportunities. Whatever measures are ultimately developed, the model presented here suggests that understanding the relationship between the supply of and demand for socially responsible investment opportunities is central to understanding the relationship between socially responsible activities and firm performance, at least as measured by a firm’s market value.

[p. 831]

Theoretical Implications

The model also has a variety of theoretical implications, both for the study of firm value more broadly and for the study of the relationship between corporate social responsibility and firm value.

DeCoupling Cash Flow and Firm Market Value. Traditional financial logic suggests that firms maximize their market value by maximizing the present value of their cash flows (Copeland et al., 1994). This link between a firm’s market value and the present value of its cash flows is based on the often unstated assumption that all of a firm’s equity holders have the same interests—to see their wealth maximized in making their investment decisions (Brealey & Myers, 2003). However, by recognizing that some equity holders may sometimes have interests besides simply maximizing their wealth in making their investment decisions, this paper decouples “maximizing a firm’s market value” from “maximizing the present value of a firm’s cash flows.” Here, a firm’s market value is determined by the supply of and demand for the kind of investment opportunities created by a firm’s strategies—in this case, the opportunity to invest in firms implementing different corporate social responsibility strategies.

In fact, there is some reason to believe that at least some current and potential equity investors may be willing to sacrifice some of their wealth maximizing interests to invest in firms pursuing socially responsible activities. For example, there continues to be significant and steady demand for mutual funds that specialize in investing in firms that meet certain corporate social responsibility criteria. Indeed, in 2003, one out of every ten dollars under professional management in the United States was invested in these kinds of mutual funds (Social Investment Forum, 2005). Moreover, those that invest in these funds often pay a financial penalty for doing so. This penalty can range as high as 3.5% for actively managed socially responsible mutual funds (Geczy, Stanbaugh, & Levin, 2003). Thus, at least some investors are apparently willing to invest in firms that engage in socially responsible activities, even though these investments may generate lower returns than investing without regard to a firm’s socially responsible activities.

It is this demand for opportunities to invest in socially responsible firms, and its relationship to the supply of these investment opportunities, that determines the market value of a firm. Thus, even though the present value of the cash flows generated by socially responsible firms may suffer, the market value of these firms can still increase.

Managerial Values and Socially Responsible Investments. This analysis also has implications for the study of the relationship between senior managers and socially responsible activities. In particular, it suggests that senior managers do not have to have particularly strong or unusual moral or value-based commitments to lead their firms to engage in socially responsible activities that reduce the present value of their cash flows. Rather, as long as demand for socially responsible investment opportunities is greater than supply, managers looking to maximize the market value of their firm will find it in their self interest to make such investments. Managerial or corporate altruism is not required to explain why firms may sometimes make these kinds of investments.14 Indeed, throughout this paper, the standard economic assumption—that firms are trying to maximize their market value—is adopted.


14 Although managerial morality is not required to motivate corporate social responsibility in the model we present here, such considerations may nevertheless influence firm decisions concerning such activities (Aguilera et al., 2007; Schneider, Oppegaard, Zollo, & Huy, 2005).

Anmerkungen

The source is given on p. 58 f. References from the source were removed.

Sichter
(SleepyHollow02), WiseWoman

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