The Politicization of Social Responsibility

Todd A. Gormley, Manish Jha and Meng Wang

No 32869, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Institutional investors are less likely to support shareholder proposals on environmental and social issues for firms headquartered in Republican-led states. The decline in support has become more pronounced in recent years, aligning with politicians emphasizing companies’ social responsibility efforts, and among firms receiving state-level subsidies and tax breaks. Investor support also varies with shifts in state leadership, dropping by 12 percentage points in the same state when Republicans are in control instead of Democrats. The findings indicate that institutional investors prioritize maximizing shareholder value and that politicians can influence investor votes by altering the value implications of shareholder proposals.

JEL-codes: G23 G30 G34 M14 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-mac
Note: CF
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