Exploring the moderating effect of financial performance on the relationship between corporate environmental responsibility and institutional investors: some Egyptian evidence

Hayam Wahba

Corporate Social Responsibility and Environmental Management, 2008, vol. 15, issue 6, 361-371

Abstract: Much of the existing literature has argued that those firms that invest in environmental initiatives attract more institutional investors. A noticeable problem with these studies is the assumption that the relationship between institutional investors and corporate environmental responsibility is a monotonic relationship that does not vary with firm financial performance. Initial findings of this study demonstrated that corporate environmental responsibility exerted a positive and significant coefficient on institutional ownership. However, when an interaction term between environmental responsibility and financial performance was included, the results verified that corporate environmental responsibility has a neutral impact on the preferences of institutional investors. Moreover, by classifying firms into two sub‐groups, according to their financial performance, environmental responsibility was found to have a positive and significant impact on institutional ownership only when financial performance is high. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.

Date: 2008
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https://doi.org/10.1002/csr.177

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:15:y:2008:i:6:p:361-371

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