The paper, öffnet eine externe URL in einem neuen Fenster investigates Corporate Social Responsibility (CSR) policies of mostly medium-sized, nonlisted family firms in the founder stage.

Markus Dick, Eva Wagner and Helmut Pernsteiner from the Department of Corporate Finance conducted a survey among executives of Polish firms and asked about their CSR engagement in different areas and about how they estimate their economic situation compared to their industry. They use novel measures of overconfidence and CSR commitment to explore the interaction between founder-controlled family firms and managerial overconfidence on CSR engagement.

First, the authors find that founder-controlled family firms show lower levels of CSR. In particular, families try to limit CSR engagement that could challenge their control over the firm, such as activities directed toward employees or in the area of governance. Second, executives’ overconfidence in those firms leads to a higher CSR engagement. This suggests that managerial overconfidence shifts the focus in founder-controlled family firms’ CSR policies from maintaining control to building reputation. Thus, the authors confirm previous findings that family firms can be both socially responsible and irresponsible at the same time. Furthermore, the results imply that psychological traits play a decisive role in their CSR policies, as the family’s preference for control can be mitigated by overconfident executives who underestimate the family’s control risk and focus on building reputation by acting socially responsible.