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Stakeholder Orientation, Product Market Competition, and the Cost of Equity

Zhihong Chen et al.

Review of Corporate Finance Studies2025https://doi.org/10.1093/rcfs/cfaf005article
AJG 3ABDC A*
Weight
0.41

Abstract

By examining required rates of return, we study how shareholders perceive stronger stakeholder orientation arising under the adoption of constituency statutes. Constituency statutes decrease (increase) the cost of equity for firms operating in high- (low-) competition industries. For firms in high-competition industries, constituency statutes increase future cash flows and performance resilience to negative industry downturns, suggesting that constituency statutes facilitate CSR activities for product differentiation in competitive industries. In contrast, for firms in low-competition industries, constituency statutes reduce future cash flows and increase tail risks, suggesting that constituency statutes shield managerial agency problems from discipline.

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https://doi.org/https://doi.org/10.1093/rcfs/cfaf005

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@article{zhihong2025,
  title        = {{Stakeholder Orientation, Product Market Competition, and the Cost of Equity}},
  author       = {Zhihong Chen et al.},
  journal      = {Review of Corporate Finance Studies},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1093/rcfs/cfaf005},
}

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Stakeholder Orientation, Product Market Competition, and the Cost of Equity

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.