This paper assesses whether shareholders drive the environmental and social (E&S) performance of firms worldwide. Across 41 countries, we find that institutional ownership is positively associated with E&S performance with additional tests suggesting this relation is causal. Our evidence shows that 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. These investors, mostly from European countries, transplant their social norms around the world.

Do institutional investors drive corporate social responsibility? International evidence

Wagner, Hannes
2019

Abstract

This paper assesses whether shareholders drive the environmental and social (E&S) performance of firms worldwide. Across 41 countries, we find that institutional ownership is positively associated with E&S performance with additional tests suggesting this relation is causal. Our evidence shows that 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. These investors, mostly from European countries, transplant their social norms around the world.
2019
2018
Dyck, Alexander; Lins, Karl; Roth, Lukas; Wagner, Hannes
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4001656
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