The Politicization of Social Responsibility

71 Pages Posted: 1 Sep 2023 Last revised: 25 Jun 2024

See all articles by Todd A. Gormley

Todd A. Gormley

Washington University in St. Louis; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Manish Jha

Georgia State University - Department of Finance

Meng Wang

University of South Florida - Muma College of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 19, 2024

Abstract

Institutional investors are less likely to support shareholder proposals involving environmental and social issues for firms headquartered in Republican-led states. The lower support concentrates in recent years, when politicians became more vocal about firms' social responsibility activities, and among larger institutions and firms, which tend to attract more attention from politicians. Investor support also shifts within states following changes in their leadership. Support for such proposals is 10 percentage points lower in the same state when it is led by Republicans instead of Democrats. The findings suggest that state-level politics and the politicization of an issue impacts institutional investors' votes.

Keywords: institutional investors, partisanship, political polarization, socially responsible investment, CSR

JEL Classification: G23, G30, G34, M14

Suggested Citation

Gormley, Todd A. and Jha, Manish and Wang, Meng, The Politicization of Social Responsibility (August 19, 2024). Available at SSRN: https://ssrn.com/abstract=4558097 or http://dx.doi.org/10.2139/ssrn.4558097

Todd A. Gormley

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
(314) 935-7171 (Phone)

HOME PAGE: http://www.gormley.info

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Manish Jha (Contact Author)

Georgia State University - Department of Finance ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

HOME PAGE: http://mjha91.github.io

Meng Wang

University of South Florida - Muma College of Business ( email )

Tampa, FL 33620
United States

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