Are Businesses Doing Well While Doing Good?
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ORCID
Kershen Huang0000-0002-7141-3668
Host
Andrea Nevins, Ph.D., M.F.A.
Publication Date
2-10-2023
Description
Traditional corporate theory emphasizes the maximization of shareholder wealth as the single objective of firms. In more recent decades, changes in social norms, as well as the accessibility to broader and more granular data, have allowed more detailed examinations of a wide array of stakeholder aspects. These include creditors, managers, employees, and even bystanders that are outside of financial contracts. Researchers have since studied how corporate actions intertwine with stakeholder well-being and ultimately the implications of these relationships on agency issues, valuations, and economic conditions. During this talk, I will introduce to the Open Classroom audience the important concept of negative externalities and how they take a toll on the state of a free market (through both theoretical concepts and a short session of economic experiment on Poll Everywhere). From there, I will review some of the most recent evidence on how the internalization of externalities by firms can contribute to desirable outcomes not only for the society, but also eventually for the firms themselves.
Are Businesses Doing Well While Doing Good?
Traditional corporate theory emphasizes the maximization of shareholder wealth as the single objective of firms. In more recent decades, changes in social norms, as well as the accessibility to broader and more granular data, have allowed more detailed examinations of a wide array of stakeholder aspects. These include creditors, managers, employees, and even bystanders that are outside of financial contracts. Researchers have since studied how corporate actions intertwine with stakeholder well-being and ultimately the implications of these relationships on agency issues, valuations, and economic conditions. During this talk, I will introduce to the Open Classroom audience the important concept of negative externalities and how they take a toll on the state of a free market (through both theoretical concepts and a short session of economic experiment on Poll Everywhere). From there, I will review some of the most recent evidence on how the internalization of externalities by firms can contribute to desirable outcomes not only for the society, but also eventually for the firms themselves.