Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/64829

What shapes CSR performance? Evidence from the changing enforceability of non-compete agreements in the United States

File Size Format  
HARC 2020 paper 91.pdf 556.2 kB Adobe PDF View/Open

Item Summary

Title:What shapes CSR performance? Evidence from the changing enforceability of non-compete agreements in the United States
Authors:Karel Hrazdil
Xin Li
Jeong Bon Kim
Keywords:Non-compete Agreements
Enforceability
CSR Performance
Date Issued:24 Aug 2019
Abstract:This paper investigates whether companies strategically engage in corporate social responsibility (CSR) practices to retain employees. Under a unique setting of exogenous variations in non-compete law enforceability in the U.S., we examine the relation between the changing enforceability of non-compete agreements and firms’ CSR performance. Using a difference-in-differences design, we find that an increase in the enforcement of non-compete agreements (which enhances a firm’s ability to retain employees) deteriorates CSR performance. In cross-sectional tests, we find that peer pressure affects CSR performance interactively with the enforceability of non-compete agreements; specifically, the strategic role of CSR performance in employee retention is more pronounced for firms facing higher peer pressure (i.e., firms that are R&D intensive and in highly competitive industries). We further find a negative relation between the absolute enforceability of non-compete agreements and CSR performance. The above findings are consistent with the notion that firms strategically engage in CSR practices to retain employees, thereby reducing the knowledge spillover associated with employee mobility.
URI:http://hdl.handle.net/10125/64829
Appears in Collections: 11 Financial: Investor Relations/Regulations/Regulators


Please email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.