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 related to environmental and social issues for firms headquartered in Republican-led states. The lower support concentrates in recent years, coinciding with politicians highlighting firms’ social responsibility efforts, and among companies that receive state-level subsidies and tax breaks. Investor backing also varies with changes in state leadership. Support for these proposals drops by 13 percentage points in the same state when Republicans are in charge instead of Democrats. The findings suggest that politicians can influence businesses by swaying the votes of institutional investors, who prioritize maximizing shareholder value in their portfolios.

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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