Abstract:
The purpose of this study is to investigate the effect of managerial myopia on corporate social responsibility (CSR) and also the moderating effect of investors' behavioral biases (emotional behavior, investor myopia and herding behavior) on the relationship between managerial myopia and corporate social responsibility. By reducing research and development and marketing activities, short-sighted managers sacrifice long-term profitability for short-term gains. Since social obligations usually have long-term benefits; Managerial myopia may affect corporate social performance. Furthermore, since management decisions are influenced by investor behavior, investors' behavioral biases are expected to influence the relationship between managerial myopia and corporate social responsibility. The research hypotheses were tested for a sample of 143 companies admitted to the Tehran Stock Exchange during the years 1391 to 1400 using a multivariate regression model, considering the fixed effects of year and industry. The results show that managerial short-sightedness has a negative effect on the corporate social responsibility score, and the behavioral patterns of investors, including emotional behavior, market short-sightedness, and herding behavior strengthen this negative relationship.
Machine summary:
Based on the results of the present research, it can be concluded that short-sighted managers, in order to satisfy shareholders and maintain the company's reputation in the market, emphasize improving short-term performance, profitability, and current stock price; therefore, they have less inclination to participate in social responsibilities, because this participation imposes costs on the company in the short term, while its benefits become apparent in the long-term performance of the company.
Indicators and measurement method of corporate social responsibility Dimensions Indicator Measurement Criteria Customers Marketing activities, quality and innovation Ratio of research, development and advertising costs to sales Benefits, quality of working life, health and safety Employees Ratio of total wages and benefits to total employees Workplace Environment Physical assets, pollution emissions Ratio of equipment, machinery and real estate to total assets Community Socio-economic support Ratio of finance to total assets Shareholders Increase in shareholder wealth Ratio of after-tax profit to total number of shares Institutional ownership Percentage of institutional investor ownership in the company Ownership concentration Percentage of total common stock ownership, major shareholders who own more than Corporate 5 percent of the company's shares Governance Managerial ownership Percentage of share ownership held by family members of the company's board of directors Percentage of total number of non-executive directors on the board of directors to the total Board of directors independence Board members Independent Variable - Managerial Myopia To measure managerial myopia, the model of Anderson and Hsiao 1 (1982) is used.
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