Impact of Managerial Ownership on Corporate Social Responsibility in Korea

Round 1

Reviewer 1 Report

The paper entitled "The impact of managerial ownership on corporate social responsibility in Korea" analyzes the relationship between managerial ownership and CSR activities in Korean public companies based on different managerial CSR incentives and ownership levels. In order to do so it is using the CSR index of the Korean Economic Justice Institute. The paper is quite interesting and well-structured (even though some arrangements and corrections might be required). Below are my comments and suggestions for the authors:

1. The Abstract needs to be extended in order to include the notion for whom the results of this study might be useful and how.
2. In the Introduction, the novelty of the paper needs to be better explained. CSR in (South) Korea might be an interesting issue due to the country specifics but I did not find any description of that.
3. The paper needs a separate Literature review section (it can be taken from Section 2 and extended). The number of references is very low and needs to be extended by additional relevant 30-40 sources. Moreover, more sources and studies focusing on South Korea need to be mentioned and analyzed.
4. The authors need to discuss the limitations of the study (e.g. secondary data) and provide explanations.
5. The Conclusions need to be extended in order to include policy implications and pathways for further research. No repetitions from the Abstract and Introduction sections should be used. More discussions on the managerial ownership on corporate social responsibility in South Korea should be provided.
6. The paper might benefit from minor English proofreading. 

Author Response

"Please see the attachment." 

Author Response File: Author Response.docx

Reviewer 2 Report

COMMENTS & SUGGESTIONS FOR AUTHORS

 

Comment 1 – General comment:

The manuscript “The impact of managerial ownership on corporate social responsibility in Korea” explores a theme of interest referring to the intercorrelation between CSR activities and managerial ownership in a particular context, in Korea. Thus, the goal of this study was to examine the relationship between managerial ownership and CSR actions in Korean public enterprises, taking into account various managerial CSR incentives and ownership levels. Based on the Korean Economic Justice Institute's CSR index, the investigation indicated that companies with larger managerial ownership had excellent CSR records.

              

Comment 2:

Regarding the research methodology, with the purpose of validating the 2 hypotheses (H1 and H2), you adequately used specific methods and instruments. The books of firms listed on KOSPI from 2013 to 2017 were reviewed to see if there was a link between managerial ownership and CSR activity. As regards data collection, financial data was extracted from KIS-VALUE, while management ownership data was collected from Korean financial supervisory authorities' firm reports. As a result, you summed a total of 3,061 firm-year observations to work with.

 

Comment 3:

A more developed introduction and an enhanced literature review (comprising more references) – are needed, in order to better place the study in the broad context and highlight why it is relevant, as well as to outline the intercorrelation between effective CSR activities and managerial ownership, respectively corporate value and equity ownership.

As regards the theoretical background on corporate social responsibility (CSR), I observed that only 8 out of 34 references specifically refer to CSR, although CSR activities represent, in fact, a central piece of this research. None of these 8 references are recent –  there is only 1 that is quite recent (dating from 2011), 2 are dating from 2010, while most of them (5 references) are from the period 1996-2006.

Therefore, in order to strengthen and improve this study, I suggest adding a more comprehensive literature review on CSR. More bibliographic references are also needed in regard to CSR (especially on the relationship between corporate positive identity, corporate value and CSR; respectively on the correlation between ownership and management, and CSR). The current state of CSR research field should be reviewed carefully, key publications cited, and controversial and diverging hypotheses highlighted.

I suggest additional reading that will surely help increase the study’s general impact, taking into consideration the international perspective, most of them from Sustainability Journal:

1. Kim, W.S.; Park, K.; Lee, S.H. Corporate Social Responsibility, Ownership Structure, and Firm Value: Evidence from Korea. Sustainability2018, 10, 2497. https://doi.org/10.3390/su10072497
2. Farcane, N.; Deliu, D.; Bureană, E. A Corporate Case Study: The Application of Rokeach’s Value System to Corporate Social Responsibility (CSR). Sustainability2019, 11, 6612, https://doi.org/10.3390/su11236612.
3. Zhang, F.; Jung, J-y. Changes in the Influence of Social Responsibility Activities on Corporate Value over 10 Years in China. Sustainability 2020, 12, 9506, https://doi.org/10.3390/su12229506.
4. Kim, M.; Kim, T. When Do CEOs Engage in CSR Activities? Performance Feedback, CEO Ownership, and CSR. Sustainability2020, 12, 8195. https://doi.org/10.3390/su12198195
5. Deliu, D. The Intertwining between Corporate Governance and Knowledge Management in the Time of Covid-19 – A Framework. Journal of Emerging Trends in Marketing and Management 2020, 1(1), 93-110; <CrossRef>.
6. Zhang, Z.; Wang, X.; Chun, D. The U-Shaped Relationship between Intellectual Capital and Technological Innovation: A Perspective on Enterprise Ownership and the Moderating Effect of CSR. Sustainability2021, 13, 12872. https://doi.org/10.3390/su132212872
7. Tarighi, H.; Appolloni, A.; Shirzad, A.; Azad, A. Corporate Social Responsibility Disclosure (CSRD) and Financial Distressed Risk (FDR): Does Institutional Ownership Matter? Sustainability2022, 14, 742. https://doi.org/10.3390/su14020742

 

Comment 4:

Because of the particular content of the section 5. Discussion and Conclusion, I advise creating 2 additional distinct sections (comprising the Discussion of the results of the research, respectively a section comprising the final concluding remarks – Conclusions). Therefore, it is advisable to create:

• Section 5. Discussion (where you should discuss the results and explain how they can be interpreted in perspective of working hypotheses – H1 and H2 – and previous studies; in this latter section the findings and their implications should be discussed in the broadest context possible, however a deeper discussion would better outline your contribution in the already existing specialty literature);
• 6. Conclusion (where you should restate your aims and objectives, and summarize your main findings and evidence for the reader)

Any research paper should end with a well-constructed conclusion. You can raise some open questions and set the scene for the next study. This is a good place to register your thoughts about possible future work. Hence, I also recommend inserting one last paragraph, comprising research limitations and further research consideration.

Since the conclusion is the last part of the research that your reader will see, it is advisable to spend some time writing the conclusion so that you can end on a high note.

 

Comment 5:

The paper “The impact of managerial ownership on corporate social responsibility in Korea” reached valuable conclusions, the research contributing to the topic regarding the analysis of the relationship between ownership and CSR activity within a company.

Based on the idea that CSR participation varies depending on the extent of managerial ownership, this study adds to the literature on the effects of business ownership on CSR investment. As you depict, the findings suggest that managers who generate information asymmetry through earnings management are less likely to spend in CSR aimed at boosting a company's image and, as a result, its worth. Finally, the research suggests that managers' decision-making traits are important determinants of CSR engagement.

 

Comment 6 – Minor comments:

Moderate English changes are required, so it is advisable to have your manuscript proofread.

 

Comment 7 – Final comments:

In conclusion, the study, which is focused on a very relevant topic, presents a relatively convincing structure and is written fluently, the research methodology being robust.

However, I believe you could improve it by adding more bibliographic references in order to outline the intercorrelation between CSR activities and ownership. As previously mentioned, the current state of CSR research field should be reviewed carefully, key publications cited, and controversial and diverging hypotheses highlighted.

In addition, you should reconsider the structure of the paper, in order to enable future readers to more easily read the content of the manuscript, by inserting two additional (distinct!) sections: Discussion and Conclusions.

 

Good-luck with your paper,

Reviewer.

Author Response

"Please see the attachment." 

Author Response File: Author Response.docx

Reviewer 3 Report

Dear authors,

I have read the paper „The impact of managerial ownership on corporate social responsibility in Korea” with interest. The authors investigate how managerial ownership affects CSR activities among KOSPI-listed companies. The authors considered the two conflicting theories of managerial ownership, management entrenchment, and the stockholder interests hypotheses.  

I appreciate the creation research model to analyze the relationship between managerial ownership and  CSR  activities.

Nevertheless, I miss in the paper some limitations to the study.

I suggest including in your Literature review or in Introduction also these references to extend the view:  K. Kampova, K. Makka, Z. Zvakova, and W. Pellowksi, “The eSEC Portal as a Tool for the Concept of Corporate Social Responsibility,” (ICETA 2018 - 16th IEEE Int. Conf. Emerg. eLearning Technol. Appl. Proc., no. November 2018), pp. 261–266. 

 I hope my comment will be useful for your future work.

I will recommend publishing your manuscript after correcting these minor revisions.

Good luck with your future research.

Author Response

"Please see the attachment." 

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

The paper has been thoroughly revised and all my comments and suggestions have been taken into consideration. I can see that the paper has been improved with the extended literature review as well as some other sections, conclusions and discussions. I can now recommend it for publication in its current form (please insure the proofreading of the final version).