Family control, institutional cross holding and corporate social responsibility

This paper examines the effect of family control on corporate social responsibility. It also investigates the role of institutional cross -owners who hold concomitant stakes in firms competing within the same industry. Using a sample of French listed firms, we find that family control negatively affects corporate social responsibility, suggesting that controlling families may have expropriation purposes and are likely to prioritize their personal interests over stakeholders' ones. The results also show that institutional cross -owners attenuate the negative impact of family control on corporate social responsibility, suggesting that institutional cross -owners act as an effective control mechanism and help mitigate the risk of expropriation by family -controlled firms. The results are robust to alternative measures of family control and to endogeneity tests and have several practical implications.