Do Institutional Investors Drive Corporate Social Responsibility? International Evidence

Alexander Dyck, Karl Lins, Lukas Roth and Hannes Wagner

No 1873, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

Abstract: This paper assesses whether shareholders drive the environmental and social (E&S) performance of firms worldwide. Across 41 countries, institutional ownership is positively associated with E&S performance with additional tests suggests this relation is causal. Institutions are motivated by both financial and social returns. Investors increase firms’ E&S performance following shocks that reveal financial benefits to E&S improvements. In cross-section, investors increase firms’ E&S performance when they come from countries where there is a strong community belief in the importance of E&S issues, but not otherwise. As such, these institutional investors transplant their social norms regarding E&S issues around the world.

Keywords: Social Responsibility; Institutional Investors; Social Norms; Culture (search for similar items in EconPapers)
JEL-codes: G15 G23 G30 M14 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Journal Article: Do institutional investors drive corporate social responsibility? International evidence (2019)
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