Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.

https://www.jstor.org/stable/pdfplus/259247.pdf

Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of who and What Really Counts

?The stakeholder theory has been advanced and justified in the management literature on the basis of its descriptive accuracy, instrumental power, and normative validity. These three aspects of the theory, although interrelated, are quite distinct; they involve different types of evidence and argument and have different implications. In this article, we examine these three aspects of the theory and critique and integrate important contributions to the literature related to each. We conclude that the three aspects of stakeholder theory are mutually supportive and that the normative base of the theory-which includes the modern theory of property rights-is fundamental. If the unity of the corporate body is real, then there is reality and not simply legal fiction in the proposition that the managers of the unit are fiduciaries for it and not merely for its individual members, that they are . . . trustees for an institution [with multiple constituents] rather than attorneys for the stockholders.

http://www.faculty.wwu.edu/dunnc3/rprnts.stakeholdertheoryofcorporation.pdf

The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications

Most theorizing on the relationship between corporate social/environmental performance (CSP) and corporate financial performance (CFP) assumes that the current evidence is too fractured or too variable to draw any generalizable conclusions. With this integrative, quantitative study, we intend to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds. Providing a methodologically more rigorous review than previous efforts, we conduct a meta-analysis of 52 studies (which represent the population of prior quantitative inquiry) yielding a total sample size of 33,878 observations. The meta-analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off, although the operationalizations of CSP and CFP also moderate the positive association. For example, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based ...

/pdf/corporate-social-and-financial-performance-a-meta-analysis-21bp3gts9c.pdf

Corporate Social and Financial Performance: A Meta-Analysis

SEQUELS ARE RARELY AS good as the originals, so I approach this review of the market efficiency literature with trepidation. The task is thornier than it was 20 years ago, when work on efficiency was rather new. The literature is now so large that a full review is impossible, and is not attempted here. Instead, I discuss the work that I find most interesting, and I offer my views on what we have learned from the research on market efficiency.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-6261.1991.tb04636.x

Efficient Capital Markets: II

This paper tests whether innovations in macroeconomic variables are risks that are rewarded in the stock market. Financial theory suggests that the following macroeconomic variables should systematically affect stock market returns: the spread between long and short interest rates, expected and unexpected inflation, industrial production, and the spread between high- and low-grade bonds. We find that these sources of risk are significantly priced. Furthermore, neither the market portfolio nor aggregate consumption are priced separately. We also find that oil price risk is not separately rewarded in the stock market.

Economic Forces and the Stock Market

Corporate Stakeholders and Corporate Finance

Trading by corporate insiders and their tippees is analyzed in Anheuser-Busch's 1982 tender offer for Campbell Taggart. Court records that identify insider transactions are used to disentangle the individual insider trades from liquidity trades. Consistent with previous studies, insider trading was found to have had a significant impact on the price of Campbell Taggart. However, the impact of informed trading on the market is complicated. Trading volume net of insider purchases rose. Contrary to the broad implications of adverse selection models, Campbell Taggart's liquidity improved when the insiders were active in the market, and the insiders received superior execution for their orders. THIS PAPER EXAMINES INSIDER trading surrounding the 1982 acquisition of Campbell Taggart, an NYSE-traded baking company, by Anheuser-Busch, the nation's largest brewer. News of the impending acquisition was leaked by one of the Anheuser-Busch directors and sequentially transmitted to a small group of individuals that proceeded to purchase a large amount of Campbell Taggart stock. During the criminal and civil litigation that followed this event, insider purchases were identified. We use the court records to isolate individual insider transactions from the flow of background trading, permitting analysis of the market's reaction to the onset of informed trading.1 Because the insider trading was not revealed to other market participants, the Campbell Taggart incident presents a unique laboratory for studying the dissemination and incorporation of private inside information into market

The Reaction of Investors and Stock Prices to Insider Trading

We show that discrimination can occur even when it is common knowledge that underlying group characteristics do not differ and when employers do not prefer same-group candidates. When employers can judge job applicants' unknown qualities better when candidates belong to the same group and hire the best prospect from a large pool of applicants, the top applicant is likely to have the same background as the employer. The model has policy, empirical, and experimental implications. For example, the model predicts that "screening discrimination" is more likely to occur and persist in sectors in which underlying quality is important but difficult to observe, there are numerous applicants, interviewing (screening) is relatively cheap, and applicants have to acquire job-specific skills.

Culture, Information, and Screening Discrimination

This study extends the literature on the pricing of low-grade bonds by examining the performance of low-grade bond funds. The findings reveal that over the long run low-grade bond fund returns are approximately equal to the returns provided by an index of high-grade bonds. The relative risks of high and low-grade bonds are more difficult to assess. Because of their shorter durations, low-grade bonds are less sensitive to movements in interest rates than high-grade bonds. On the other hand, iow-grade bonds are much more sensitive to changes in stock prices than high-grade bonds. When adjusted for risk using a simple two-factor model, the returns on low-grade bond funds are not statistically different from the returns on high-grade bonds. ONE OF THE ARGUMENTS used by Drexel Burnham Lambert to promote the sale of low-grade or "junk" bonds is that the risk adjusted returns are greater than those for more highly rated bonds.1 Though Drexel's hypothesis is of keen interest to both academics and practitioners, definitive tests have proved difficult to conduct because junk bonds are traded over-the-counter by a limited number of market makers so that reliable transaction data are rarely available. The problem is particularly acute in the years prior to the rapid expansion of the original issue low-grade market in the early 1980's. Given the data limitations, one approach that has been used by Altman [1989] and Goodman [1989] to examine the Drexel hypothesis is to estimate expected returns indirectly by reducing promised returns to reflect the expected future defaults and calls. Altman [1987], Altman and Nammacher [1985], and Weinstein [1987] all report annual default rates for low-grade bonds in the range of 1% to 3% per year. Assuming that expected future default rates are in line with these figures, and not adjusting for other sources of risk, the 3% to 5% yield spreads between junk bonds and investment grade bonds appear to support Drexel's hypothesis. However, recent research by Asquith, Mullins and Wolff [1989], henceforth AMW, and Altman [1989] calls this conclusion into question. Both Altman and AMW find that

https://www.jstor.org/stable/info/2328688

Bradford Cornell

Papers

Corporate Stakeholders and Corporate Finance

The Reaction of Investors and Stock Prices to Insider Trading

Culture, Information, and Screening Discrimination

The Investment Performance of Low‐grade Bond Funds

The Money Supply Announcements Puzzle: Review and Interpretation