Founder-Controlled Family Firms, Overconfidence, and Corporate Social Responsibility Engagement: Evidence From Survey Data

Abstract

Drawing on (mostly) medium-sized and unlisted Polish firms, this study explores the influence of the interaction between founder-controlled family firms and managerial overconfidence on corporate social responsibility (CSR). We demonstrate that founder-controlled family firms show low levels of CSR engagement. This suggests that families try to limit CSR activities that could challenge their control and thus their socioemotional endowment. Moreover, overconfident executives in these firms tend to exhibit superior CSR performance. Consequently, 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.