Does corporate social responsibility affect the participation of minority shareholders in corporate governance?

Kong

Journal of Business Economics and Management, 2013, vol. 14, issue sup1, S168-S187

Abstract: Using a unique minority shareholders voting dataset, we aim to shed light on several important issues on corporate governance and investor protection. Specifically, we first examine the effects of social responsibility ( CSR ) on minority shareholder participation ( MSP ). Then, we investigate whether the mounting attention to CSR due to certain events has marginal effects on MSP , and whether CSR and MSP affect firms' market performances. Collectively, we find that: 1) firms' CSR levels significantly affect MSP and can substitute the governance role of minority shareholders to some extent; 2) exogenous shocks related to CSR can significantly affect MSP ; and 3) firms with higher CSR level and lower MSP enjoy higher market value improvements. In addition, we find limited evidence that institutional investors may face conflict-of-interest pressures and vote against individual investors. Our results are robust to alternative specifications and offer significant policy implications.

Date: 2013
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DOI: 10.3846/16111699.2012.711365

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