Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market

This study examines the impact of a company’s performance in terms of corporate social responsibility (CSR) on investors’ perceptions of corporate cash holdings in South Korea. The study postulates that, in emerging markets, such as South Korea, companies’ CSR activities are often implemented strate...

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Autores principales:	Hyunjung Choi, Haeyoung Ryu
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	corporate social responsibility cash holdings company value emerging market Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/2d8e4e49ba9a4f98815bb3822bb1a7ef
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id	oai:doaj.org-article:2d8e4e49ba9a4f98815bb3822bb1a7ef
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spelling	oai:doaj.org-article:2d8e4e49ba9a4f98815bb3822bb1a7ef2021-11-25T19:03:26ZCorporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market10.3390/su1322126892071-1050https://doaj.org/article/2d8e4e49ba9a4f98815bb3822bb1a7ef2021-11-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/22/12689https://doaj.org/toc/2071-1050This study examines the impact of a company’s performance in terms of corporate social responsibility (CSR) on investors’ perceptions of corporate cash holdings in South Korea. The study postulates that, in emerging markets, such as South Korea, companies’ CSR activities are often implemented strategically by the management. In emerging economies, companies’ cash holdings are not subject to strict regulation of external capital providers. Hence, companies raise cash easily and manage cash holdings at their discretion, often resulting in agency problems between the management and shareholders. The study’s results reveal that capital market investors negatively perceive the cash holdings of companies actively engaged in CSR. Investors do not expect the cash held by such companies to increase their corporate value. In other words, companies may use internal funds rather than debt for financing CSR activities.Hyunjung ChoiHaeyoung RyuMDPI AGarticlecorporate social responsibilitycash holdingscompany valueemerging marketEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 12689, p 12689 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	corporate social responsibility cash holdings company value emerging market Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	corporate social responsibility cash holdings company value emerging market Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Hyunjung Choi Haeyoung Ryu Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
description	This study examines the impact of a company’s performance in terms of corporate social responsibility (CSR) on investors’ perceptions of corporate cash holdings in South Korea. The study postulates that, in emerging markets, such as South Korea, companies’ CSR activities are often implemented strategically by the management. In emerging economies, companies’ cash holdings are not subject to strict regulation of external capital providers. Hence, companies raise cash easily and manage cash holdings at their discretion, often resulting in agency problems between the management and shareholders. The study’s results reveal that capital market investors negatively perceive the cash holdings of companies actively engaged in CSR. Investors do not expect the cash held by such companies to increase their corporate value. In other words, companies may use internal funds rather than debt for financing CSR activities.
format	article
author	Hyunjung Choi Haeyoung Ryu
author_facet	Hyunjung Choi Haeyoung Ryu
author_sort	Hyunjung Choi
title	Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
title_short	Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
title_full	Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
title_fullStr	Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
title_full_unstemmed	Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market
title_sort	corporate social responsibility and the value of cash holdings: evidence from the korean stock market
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/2d8e4e49ba9a4f98815bb3822bb1a7ef
work_keys_str_mv	AT hyunjungchoi corporatesocialresponsibilityandthevalueofcashholdingsevidencefromthekoreanstockmarket AT haeyoungryu corporatesocialresponsibilityandthevalueofcashholdingsevidencefromthekoreanstockmarket
_version_	1718410331366096896

Corporate Social Responsibility and the Value of Cash Holdings: Evidence from the Korean Stock Market

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