The shared costs of pursuing shareholder values

Michele Fioretti, Victor Saint-Jean and Simon C. Smith

No 362, Working Papers from The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State

Abstract: Does shareholder visibility affect firms' prosocial behavior? What implications for other shareholders? Exploiting quasi-experimental variation from media coverage around Annual General Meetings and major crises (COVID-19 pandemic and Russian invasion of Ukraine), we show that prominent shareholders support costly prosocial initiatives when these yield reputational benefits. In contrast, less-visible financial blockholders oppose such expenditures at their portfolio firms and prefer to act themselves. Prosocial actions driven by reputational motives reduce investment, productivity, and profits by 1 - 3%, imposing costs on other shareholders. Our findings reveal new implications for minority investors of unobservable intra-shareholder conflicts that emerge when examining shareholder incentives.

Keywords: shareholder value; wealth; conflict; warm glow; reputation; exit and voice; social responsibility; charitable donations; covid; Ukraine; Russia (search for similar items in EconPapers)
JEL-codes: G32 G41 M14 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-cis
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/329627/1/193851937X.pdf (application/pdf)

Related works:
Working Paper: The Shared Costs of Pursuing Shareholder Values (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cbscwp:329627

Access Statistics for this paper

More papers in Working Papers from The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().