Investor horizons, long-term blockholders, and corporate social responsibility

By Simon Glossner. Journal of Banking & Finance, 2019

145 citations recorded by the source corpus.

Abstract This paper investigates whether or not shareholders benefit from corporate social responsibility (CSR) by studying the effect of institutional investors on CSR. After all, arguing against CSR is hard when investors push for it. I find that longer investor horizons lead to significantly more CSR. This positive effect, however, is moderated by long-term investors who hold large ownership blocks. Long-term blockholders ensure, through monitoring, that managers do not blindly increase CSR, but rather that managers pursue a CSR strategy that reduces the risk of costly incidents. A battery of robustness tests indicates causality. Overall, these findings indicate that CSR is in the interests of long-term investors if CSR prevents incidents.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/441c4249b7443676a9f485c2db533d9b2b9bdb4b

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Citations in the corpus

Firms and social responsibility: A review of ESG and CSR research in corporate finance (2021, background): “Consistent with this, Gloßner (2019) uses lead-lag regressions of long-term investors, primarily blockholders, and concludes that they have a positive relationship with firms’ ESG/CSR scores. In contrast, Starks, Venkat, and Zhu (2019) argue and provide evidence that long-term institutional investor”
Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 U.S. Elections (2021, unknown): “Similarly, Glossner (2019) finds that long-term investors lead to more CSR activities.”