Societal Trust and the Economic Behavior of Nonprofit Organizations

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dc.contributor.authorFelix, Robert
dc.contributor.authorGaynor, Greg
dc.contributor.authorPevzner, Mikhail
dc.contributor.authorWilliams, Jan L.
dc.date.accessioned2017-11-07T23:59:21Z
dc.date.available2017-11-07T23:59:21Z
dc.date.issued2017
dc.description.abstractThis study explores the impact of societal trust on the economic behavior of nonprofit organizations. Although prior studies reveal that trust has a positive impact on the economic behavior of for-profit firms, the institutional differences between the two organization types make it unclear whether trust plays a similar role in nonprofits. Our results show that nonprofits operating in higher trust areas are more likely to overspend on administrative expenses. This positive relationship between trust and overspending is primarily driven by service organizations, as opposed to public charities. Moreover, within service organizations, we find that the positive trust-administrative overspending association is most prevalent in situations of weaker monitoring or governance. Additional tests show trust has a similar impact on excess compensation and abnormal accruals in service organizations. Overall, our findings suggest that trust may provide opportunities for nonprofit managers, particularly in service-oriented organizations, to engage in opportunistic behavior that may be exacerbated by weaker forms of oversight.en_US
dc.format.extent42 pagesen_US
dc.genrejournal articlesen_US
dc.identifierdoi:10.13016/M21G0HW52
dc.identifier.citationFelix, R., Gaynor, G., Pevzner, Mikhail., and Williams, J.L. (forthcoming). Societal Trust and the Economic Behavior of Nonprofit Organizations. Advances in Accounting.en_US
dc.identifier.urihttp://hdl.handle.net/11603/7430
dc.language.isoen_USen_US
dc.publisherAdvances in Accountingen_US
dc.relation.isAvailableAtUniversity of Baltimore
dc.subjectTrusten_US
dc.subjectNon-Profit Organizationsen_US
dc.subjectOpportunistic Spendingen_US
dc.subjectAdministrative Expenseen_US
dc.titleSocietal Trust and the Economic Behavior of Nonprofit Organizationsen_US
dc.typeTexten_US

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