Stephen Pavelin

Voluntary Environmental Disclosures by Large UK Companies

This paper examines the patterns in voluntary environmental disclosures made by a sample of large UK companies. The analysis distinguishes between the decision to make a voluntary environmental disclosure and decisions concerning the quality of such disclosures and examines how each type of decision is determined by firm and industry characteristics. We find that larger, less indebted companies with dispersed ownership characteristics are significantly more likely to make voluntary environmental disclosures, and that the quality of disclosures is positively associated with firm size and corporate environmental impact. We find significant cross-sector variation in the determinants of both the participation and quality decisions. Furthermore, the manner of this variation differs between the two. Copyright 2006 The Authors Journal compilation (c) 2006 Blackwell Publishing Ltd.

Gender and Ethnic Diversity Among UK Corporate Boards

This paper investigates the ethnic and gender diversity of the corporate board of UK companies, placing particular emphasis on links to board size and industry characteristics. We employ a novel dataset that covers a large sample of UK PLCs and describes a director’s gender, ethnicity and position held. We find both ethnic and gender diversity to be very limited, and that diversity is somewhat less pronounced among executive positions. We find significant cross‐sector variation in gender diversity, with an above average prevalence of women in Retail, Utilities, Media and Banking, while such variation in ethnic diversity is considerably less pronounced. Our evidence suggests that a close proximity to final consumers plays a more significant role in shaping board diversity than does the female presence among the industry’s workforce. We argue that this shows that board diversity is influenced by a firm’s external business environment and particularly an imperative to reflect corresponding diversity among its customers.

Corporate Reputation and Women on the Board

In this paper, we investigate the determinants of corporate reputation, derived from the assessments of managers and market analysts, of a sample of large UK firms. Along with the influences of a variety of firm attributes, we find a reputational effect associated with a female presence at board level. This effect varies across sectors and demonstrates the influence of a firms stakeholder environment in determining whether a female presence on the board enhances or harms the reputation of the firm. The pattern that emerges indicates that the presence of women on the board is favourably viewed in only those sectors that operate close to final consumers. We argue that the nature of this effect reflects an imperative for equality of representation that highlights the need to reflect gender diversity among customers.

Corporate Charitable Giving, Multinational Companies and Countries of Concern

This paper investigates the degree to which corporate charitable giving is influenced by a firms internationalization and/or whether it has operations in one or more countries of concern. For a sample of large UK firms, we find evidence of a positive effect not for internationalization per se, but only for a presence in particular countries. In this connection, the salient country characteristic is a lack of political rights and/or civil liberties, and the positive impact on charitable giving is restricted to a presence in only those countries that are, according to Freedom House indicators, most lacking in this respect. Furthermore, our study highlights a mode of corporate response to stakeholder concerns and pressures – offsetting – that is qualitatively different from those suggested in earlier conceptual literatures.

Is Philanthropy Strategic? An Analysis of the Management of Charitable Giving in Large UK Companies

Recent evidence suggests that the level of philanthropic donations made by large UK businesses has grown significantly over the last 20 years (Arulampalam & Stoneman 1995, Campbell et al. 2002). The most recent statistics indicate that the largest 100 UK firms collectively contributed over d630m in 2002/3, a rise of 26% on the previous year, and that the proportion of profits given to charities by these companies approximately doubled between 2001 and 2003. The growing importance of corporate philanthropy is reflected in the proliferation of recent articles in the academic literature, many of which chart the chronological development of corporate philanthropy in the United States or the United Kingdom or examine the correlates of philanthropy (Arulampalam & Stoneman 1995, Moore 1995, Himmelstein 1997, Adams & Hardwick 1998, Saiia 2000, 2002, Bartkus et al. 2002, Campbell et al. 2002, Porter & Kramer 2002, Saiia et al. 2003, Siefert et al. 2003). A variety of motivations for firms making philanthropic donations have been advanced in the existing literature (see Siefert et al. 2003: 195– 196 for a useful overview). Among the alternative motivations identified in the literature for philanthropy are the maximization of managerial utility that is derived from association with good works, the altruistic desire for companies to return some of the wealth generated through economic activities to their communities, and economic motives that originate in the desire to enhance worker productivity and goodwill among consumers (Navarro 1988, Young & Burlingame 1996, Saiia et al. 2003). Within these alternative motivations, a central path paints philanthropy both as a way for companies to demonstrate their social responsiveness to the communities in which they operate (Wood & Jones 1995, Berman et al. 1999), and as an activity that stimulates goodwill towards companies within those communities. Earlier work has argued that corporate philanthropy influences the perceptions of the firm in the eyes of a variety of stakeholders including investors, customers, suppliers, actual or potential employees, and the voluntary sector (Smith 1994, Himmelstein 1997, Saiia et al. 2003). Existing research into the motivations for corporate philanthropy provides mixed evidence concerning the degree to which philanthropy is The first two authors are, respectively, Lecturer and Reader at the School of Management, University of Bath, UK. The third author is Lecturer in Economics, Department of Economics, University of Reading, UK.

The Effects of Corporate Social Performance on the Cost of Corporate Debt and Credit Ratings

This study investigates the differential impact that various dimensions of corporate social performance have on the pricing of corporate debt as well as the assessment of the credit quality of specific bond issues. The empirical analysis, based on an extensive longitudinal data set, suggests that overall, good performance is rewarded and corporate social transgressions are penalized through lower and higher corporate bond yield spreads, respectively. Similar conclusions can be drawn when focusing on either the bond rating assigned to a specific debt issue or the probability of it being considered to be an asset of speculative grade.

Follow-my-leader FDI and tacit collusion

Abstract This paper presents a simple model to illustrate the following idea: domestic rivals may be motivated to set up foreign production in the same country because the replication of each other’s foreign direct investment (FDI) facilitates collusive behaviour in the market in which they compete. This implies positive interdependence between firms’ FDI decisions, i.e. foreign investment by one firm brings increased incentive for others to follow suit.

Corporate Reputation and Stock Returns: Are Good Firms Good for Investors?

This paper employs a unique dataset from the UK based on ten years of surveys of company directors and analysts conducted for Management Today to examine the relationship between a firm’s reputation and the returns on its shares. We find that investors who purchase stocks with reputation scores that have risen significantly can make abnormal returns. Also, firms whose scores have fallen substantially still exhibit positive abnormal returns in both the short and long run when the market index is employed as a benchmark. However, when a more appropriate comparator is used, evidence of out-performance entirely disappears

The Interactive Financial Effects between Corporate Social Responsibility and Irresponsibility

Firms typically present a mixed picture of corporate social performance (CSP), with positive and negative indicators exhibited by the same firm. Thus, stakeholders’ judgements of corporate social responsibility (CSR) typically evaluate positives in the context of negatives, and vice versa. We present two alternative accounts of how stakeholders respond to such complexity, which provide differing implications for the financial effects of CSP: reciprocal dampening and rewarding uniformity. Our US panel study finds a U-shaped relationship – firms that exhibit solely positive or solely negative indicators outperform firms that exhibit both – which supports the notion that stakeholders’ judgements of CSR reward uniformity.

The Social Performance and Responsibilities of Entrepreneurship

This article summarizes the commentary essay and two research articles comprising the special research forum on “The Social Performance and Responsibilities of Entrepreneurship.” A commentary essay by William J. Baumol addresses the social responsibilities of successful entrepreneurs. A research article by Laura J. Spence examines the social responsibilities of small businesses. A research article by Henning Engelke, Stefanie Mauksch, Inga-Lena Darkow, and Heiko von der Gracht examines scenarios for social enterprises in Germany.