Year: 2015
Type: article
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. 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. Overall, these results indicate that investors drive firms’ E&S performance around the world and transplant their local social norms in that process.
Source: Journal of Financial Economics
Authors: Alexander Dyck, Karl V. Lins, Lukas Roth, Hannes F. Wagner
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,740
OpenAlex ID: W3123658139