Active Ownership

Review of Financial Studies (RFS), Volume 28, Issue 12, pp. 3225-3268, 2015.

Fox School of Business Research Paper No. 16-009

55 Pages Posted: 1 Oct 2012 Last revised: 19 Mar 2016

Elroy Dimson

University of Cambridge - Judge Business School; London Business School

Oğuzhan Karakaş

Boston College - Department of Finance

Xi Li

London School of Economics

Date Written: August 7, 2015

Abstract

We analyze an extensive proprietary database of corporate social responsibility engagements with U.S. public companies from 1999-2009. Engagements address environmental, social, and governance concerns. Successful (unsuccessful) engagements are followed by positive (zero) abnormal returns. Companies with inferior governance and socially conscious institutional investors are more likely to be engaged. Success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes. Collaboration among activists is instrumental in increasing the success rate of environmental/social engagements. After successful engagements, particularly on environmental/social issues, companies experience improved accounting performance and governance and increased institutional ownership.

Keywords: Engagement, corporate social responsibility (CSR), environmental, social, and governance (ESG), socially responsible investing (SRI), universal ownership, shareholder activism

JEL Classification: G15, G23, G34

Suggested Citation

Dimson, Elroy and Karakaş, Oğuzhan and Li, Xi, Active Ownership (August 7, 2015). Review of Financial Studies (RFS), Volume 28, Issue 12, pp. 3225-3268, 2015.; Fox School of Business Research Paper No. 16-009. Available at SSRN: https://ssrn.com/abstract=2154724 or http://dx.doi.org/10.2139/ssrn.2154724

Elroy Dimson (Contact Author)

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 20 7000 8212 (Phone)
+44 700 607 7390 (Fax)

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
44 20 7000 7000 (Phone)
44 700 607 7390 (Fax)

Oğuzhan Karakaş

Boston College - Department of Finance ( email )

Carroll School of Management
Fulton Hall 334, 140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
+1-617-552-1175 (Phone)
+1-617-552-0431 (Fax)

HOME PAGE: http://www2.bc.edu/oguzhan-karakas/

Xi Li

London School of Economics ( email )

United Kingdom

HOME PAGE: http://www.lse.ac.uk/accounting/facultyAndStaff/profiles/Li.aspx

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