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Can Private Equity Funds Foster Corporate Social Responsibility?

Abstract : Is Corporate Social Responsibility (CSR), defined as the commitment of business to contribute to sustainable development and take responsibility for their impacts on society, coherent with Private Equity? To answer this question, the Chapter 1 of this Ph.D. dissertation surveys the literature on the economic determinants of CSR behaviors and its impacts on market structure, economic performance and society. Chapter 2 then tackles how firms can both succeed on profitability and sustainability levels and shows that the diverse policies encompassed in CSR do not equally matter to do well and do good. Chapter 3 empirically assesses where the French Private Equity industry stands in terms of CSR integration, and why. Responsible investment practices spread among mainstream Private Equity investors, characterized by a specific investor engagement and strategically driven by a need for new value creation sources, increased risk management and differentiation. Chapter 4 uses signaling theory to ask whether CSR could be used by Private Equity investors to better select their investments. It presents a money-burning investment game and experimentally tests it comparing a public good signal to a standard advertising signal. Results indicate that CSR does not improve firm selection, but it does not perfectly substitute to standard money-burning signals and impacts equilibrium selection. Finally, Chapter 5 turns to professional Private Equity investors to quantify the impact sustainable and unsustainable corporate practices have on equity financing in a unique field experiment. An asymmetric effect is observed, entrepreneurs having more to loose from unsustainable practices than to gain from sustainable ones. The dissertation concludes by discussing main results, implications for the Private Equity industry and public policies, and the limits and possible extensions of this research.
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Contributor : Vanina Forget Connect in order to contact the contributor
Submitted on : Wednesday, March 6, 2013 - 9:04:08 AM
Last modification on : Friday, August 5, 2022 - 2:38:11 PM
Long-term archiving on: : Friday, June 7, 2013 - 3:57:49 AM


  • HAL Id : tel-00797217, version 1



Vanina D. Forget. Can Private Equity Funds Foster Corporate Social Responsibility?. Economics and Finance. Ecole Polytechnique X, 2012. English. ⟨tel-00797217⟩



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