“Institutional shareholders and corporate social responsibility” (2019), by Tao Chen et al. Business and Management research paper. Original abstract below, unchanged. No free PDF was found.

Institutional shareholders and corporate social responsibility

Tao Chen, Hui Dong, Chen Lin · June 15, 2019 · Business and Management

Abstract

This study uses two distinct quasi-natural experiments to examine the effect of institutional shareholders on corporate social responsibility (CSR). We first find that an exogenous increase in institutional holding caused by Russell Index reconstitutions improves portfolio firms’ CSR performance. We then find that firms have lower CSR ratings when shareholders are distracted due to exogenous shocks. Moreover, the effect of institutional ownership is stronger in CSR categories that are financially material. Furthermore, we show that institutional shareholders influence CSR through CSR-related proposals. Overall, our results suggest that institutional shareholders can generate real social impact.

Source page DOI: 10.1016/j.jfineco.2019.06.007