Download This PaperDo Institutional Investors Drive Corporate Social Responsibility? International Evidence
Journal of Financial Economics (JFE), Forthcoming
University of Alberta School of Business Research Paper No. 3150282
60 Pages Posted: 28 Mar 2018
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Do Institutional Investors Drive Corporate Social Responsibility? International Evidence
Do Institutional Investors Drive Corporate Social Responsibility? International Evidence
Date Written: March 1, 2018
Abstract
This paper assesses whether shareholders drive the environmental and social (E&S) performance of firms worldwide. Across 41 countries, institutional ownership is positively associated with E&S performance with additional tests suggests this relation is causal. Institutions are motivated by both financial and social returns. Investors increase firms’ E&S performance following shocks that reveal financial benefits to E&S improvements. In cross-section, investors increase firms’ E&S performance when they come from countries where there is a strong community belief in the importance of E&S issues, but not otherwise. As such, these institutional investors transplant their social norms regarding E&S issues around the world.
Keywords: Corporate Social Responsibility, Institutional Investors, Social Norms, Culture
JEL Classification: G15, G23, G30, M14
Suggested Citation: Suggested Citation
I.J. Alexander Dyck
University of Toronto - Rotman School of Management ( email )
105 St. George Street
Toronto, Ontario M5S 3E6 M5S 3E6
Canada
416-946-0819 (Phone)
Lukas Roth
University of Alberta - Department of Finance and Statistical Analysis ( email )
2-32E Business Building
Edmonton, Alberta T6G 2R6
Canada
780-492-4431 (Phone)
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium