The Influence of Ownership Concentration on Firm Resource Allocations to Employee Relations, External Social Actions, and Environmental Action

Vicente Lima Crisóstomo, Fátima de Souza Freire


Objective – The purpose of this work is to examine the influence of
ownership concentration on the funds allocated to CSR in Brazilian firm.
Design/methodology/approach – Econometric models have been
estimated, with an index of CSR as the dependent variable, and
ownership concentration as the explanatory variable, together with
relevant control variables suggested in the literature (profitability,
leverage, growth opportunities, and firm size). A Brazilian CSR database
has been built using data extracted from two different sources, one
relative to CSR data and another that provides ownership structure and
financial data. CSR policy is proxied by an index obtained as the ratio
between funds directed to social action (employee relations, external
social actions, and environmental action) and net sales.
Findings – The findings indicate that CSR is positively influenced by
firm ownership concentration in Brazil.
Practical implications – The positive influence of ownership
concentration on CSR may be an indication that large controlling
shareholders of Brazilian firm may be considering CSR as an effective
way to improve the image and reputation of the firm and its owners. This
belief may be stimulating CSR projects and their disclosure in Brazil.
Originality/value – This work is an additional contribution to the
debate about the role played by ownership structure on CSR. Taking
into account that the central point of Stakeholder Theory is a firm’s
concern with all its stakeholders, the research builds on Stakeholder
and Agency Theories by assessing the influence of large controlling
shareholders on a firm’s social concerns.


Corporate social responsibility; Ownership structure; Ownership concentration.

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