The Politicization of Social Responsibility

58 Pages Posted: 1 Sep 2023 Last revised: 24 Nov 2023

See all articles by Todd A. Gormley

Todd A. Gormley

Washington University in St. Louis; European Corporate Governance Institute (ECGI)

Manish Jha

Georgia State University - Department of Finance

Meng Wang

Georgia State University - Robinson College of Business

Date Written: November 16, 2023

Abstract

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

Gormley, Todd A. and Jha, Manish and Wang, Meng, The Politicization of Social Responsibility (November 16, 2023). 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

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

Georgia State University - Robinson College of Business ( email )

P.O. Box 4050
Atlanta, GA 30303-3083
United States

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