Sustainable Governance Mechanisms

90 minutos
Expositor / Institución
David Jonas Schröder
Seminarios UCEMA: Sustainable Governance Mechanisms

Paper 1 (Foundation Ownership and Sustainability): The increasing focus on corporate social responsibility and sustainability has inspired a search for institutional arrangements that promote responsible business behavior. In this study, we focus on foundation ownership, which is observed in large companies like Bosch and Bertelsmann (Germany), Maersk and Novo Nordisk (Denmark), Hershey (US), the Wallenberg companies (Sweden) and the Tata Group (India). Foundation ownership seems to be an institution suited to foster responsible business behavior because of muted profit incentives and long-term commitment to philanthropy and promotion of the company. Based on environmental, social, and governance (ESG) data from Asset4, Bloomberg and S&P Global and a unique dataset of publicly listed firms from 28 countries over the period 2003-2020, we investigate empirically, whether foundation-owned firms (FOFs) are more socially responsible and environmentally sustainable than firms with more conventional ownership structures. We find that FOFs exhibit higher ESG performance than matched family firms, and they do no worse than matched investor-owned firms. For identification, we use the 2008 financial crisis as a cut-off point in a difference-in-difference test. We show that foundation-owned companies’ sustainability engagements are better able to withstand this negative shock. Paper 2 (Corporate Payouts, ESG, and Short-termism): In recent years, academics and politicians have been increasingly concerned about the magnitude of shareholder payouts by corporations. These concerns are focused on the rising levels of repurchases and dividends, which are viewed as signs of business unsustainability and short-termism. But, the evidence offered, on the association between social responsibility and payout policy is limited thus far. Hence, in this study, I assess this relationship based on environmental, social, and governance (ESG) data from two prominent rating agencies - namely Asset4 and Bloomberg - and data from the Euro Stoxx 600 firms from 2002 to 2020. Using fixed-effect regressions, I find that socially responsible firms (as measured by high ESG ratings) pay out significantly less to their shareholders. I further show that the negative relationship between ESG and shareholder payouts is more pronounced for firms with higher levels of investment opportunities, asset specificity, or those with more conservative capital structures. These results suggest that excessive corporate payouts may be related to short-termism in the EU.

David Jonas Schröder
David Jonas Schröder

Abogado de la Universidad de Buenos Aires, Master en economía y ciencias políticas de Eseade. Periodista, autor de “Hágase tu voluntad. Bajar del cielo para conseguir un cargador de iPhone”, “10 Ideas falsas que favorecen al despotismo. Las dictaduras del siglo XXI en las mentes de sus víctimas”. Su último trabajo es “YPF El default emocional argentino”. Benegas se define como un defensor de la libertad individual, lo cual se ve claramente en cada una de sus intervenciones.