The Politicization of Social Responsibility
58 Pages Posted: 1 Sep 2023 Last revised: 24 Nov 2023
Date Written: November 16, 2023
Institutional investors' support for socially responsible investment (SRI) proposals is lower for firms headquartered in Republican-led states. The lower support concentrates in recent years, which coincides with when politicians became more vocal regarding firms’ SRI activities, among larger institutions and firms, and during months of high political polarization. The shift in investor support also occurs within states following changes in political leadership. Support for SRI 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 SRI impacts institutional investors’ voting decisions.
Keywords: CSR, institutional investors, partisanship, political polarization, socially responsible investment
JEL Classification: G23, G30, G34, M14
Suggested Citation: Suggested Citation