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Title: Institutional shareholders and corporate social responsibility
Authors: Chen, Tao
Dong, Hui
Lin, Chen
Keywords: Business::General
Issue Date: 2019
Source: Chen, T., Dong, H. & Lin, C. (2019). Institutional shareholders and corporate social responsibility. Journal of Financial Economics, 135(2), 483-504.
Journal: Journal of Financial Economics
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.
ISSN: 0304-405X
DOI: 10.1016/j.jfineco.2019.06.007
Rights: © 2019 Elsevier B.V. All rights reserved. This paper was published in Journal of Financial Economics and is made available with permission of Elsevier B.V.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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