Abstract:
The purpose of the present study is to investigate the relationship between corporate social responsibility and investment efficiency with particular emphasis on the mediating role of agency cost and information asymmetry in a sample of 121 firms listed on the Tehran Stock Exchange during the time period from 2012 to 2017. The research hypotheses are tested using multivariate regression analysis based on panel data and Eviews software. The results indicate that corporate social responsibility is negatively correlated with investment inefficiency. In other words, corporate social responsibility leads to reduced investment inefficiency. Also, information asymmetry plays a mediating role in the relationship between corporate social responsibility disclosure and underinvestment, whereas the variable of agency cost mediates the association between corporate social responsibility disclosure and overinvestment.
Machine summary:
The Mediating Effect of Information Asymmetry and Agency Costs on the Relationship Between CSR and Investment Efficiency Rohollah Arab*, Mohammad Gholamrezapoor, Elyas Toraj Department of Accounting, Facility Member of Golestan Institute of Higher Education, Gorgan, Iran.
ABSTRACT The purpose of the present study is to investigate the relationship between corpo- rate social responsibility and investment efficiency with particular emphasis on the mediating role of agency cost and information asymmetry in a sample of 121 firms listed on the Tehran Stock Exchange during the time period from 2012 to2017.
Therefore, the sec- ond hypothesis is developed as follows: Hypothesis 2: diminished information asymmetry plays a mediating role in the relationship (View the image of this page) Efficiency Agency problems are argued to loom when managers or controlling shareholders ex- ploit corporate resources to their personal benefits and at the expense of minority shareholders [6,21,23,34,40,43].
There- fore, the second hypothesis is calculated in terms of three conceptual frameworks as follows: (View the image of this page) Table 1: The Sampling Process (View the image of this page) To test the third hypothesis, three various regression models are adopted to estimate the mediating role of agency cost (free cash flow) as follows: (View the image of this page) Dependent variable: Following Gomariz and Ballesta [34] and Samet and Jarboui [59], investment inefficiency serves as the dependent variable of the present study.
S. , Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 1984, 13, P.