Mandatory corporate social responsibility and foreign institutional investor preferences

Andrew Marshall, Sandeep Rao, Partha P. Roy and Chandra Thapa

Journal of Corporate Finance, 2022, vol. 76, issue C

Abstract: This study examines whether the heterogeneity among foreign institutional investors (FIIs) matters when investing in socially responsible investee firms. Exploiting a mandated corporate social responsibility (CSR) regulation in India and using manually collected CSR expenditure data, the results of a quasi-natural experiment confirm that firms that comply with the CSR mandate attract greater investment from FIIs. This positive nexus holds for both existing and new FIIs. However, the heterogeneity of FIIs plays a significant moderating role because FIIs from civil law origin countries and those considered independent and long-term investors invest more in mandated CSR firms.

Keywords: CSR; Foreign institutional investors; Legal origin; Independent and long-term investors; ESG (search for similar items in EconPapers)
JEL-codes: G23 G38 M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:76:y:2022:i:c:s0929119922001043

DOI: 10.1016/j.jcorpfin.2022.102261

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