Journal
JOURNAL OF BANKING & FINANCE
Volume 101, Issue -, Pages 256-269Publisher
ELSEVIER
DOI: 10.1016/j.jbankfin.2018.11.015
Keywords
Corporate social responsibility (CSR); Institutional investor; Investment horizon; Monitoring incentive
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Funding
- Korean Ministry of Science and ICT through the Graduate School of Green Growth at KAIST College of Business in 2015
- Sogang University Research Grant of 2018 [201810007.01]
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This paper examines how the investment horizons of a firm's institutional investors affect its corporate social responsibility (CSR) activities. Using data on U.S. firms' CSR ratings over the 1995-2012 period, we find that longer investment horizons are positively related to CSR. Further, active long-term institutions increase CSR whereas passive long-term institutions have no significant effect. Our results suggest that investors with long-term horizons have more incentives to monitor their firms which leads managers to engage in more vigorous CSR activities. (C) 2019 Elsevier B.V. All rights reserved.
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