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Institutional investors' site visits and corporate social responsibility: Evidence from China

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  • Zhou, Taiyun
  • Gan, Jiawu

Abstract

Site visits are regarded as crucial ways of external monitoring and information acquisition for institutional investors and thus play a role in shaping firm investment decisions. However, little research has explored the causal effect of institutional investors' site visits on corporate social responsibility (CSR). Based on firm-level data from China during the period 2012–2019, we find that institutional investors' site visits enhance firms' CSR performance. We further examine two potential mechanisms through which institutional investors' site visits push for CSR improvements by engaging in monitoring and by delivering high-quality information to the market. In addition, our results show that this positive effect is particularly significant among firms with greater financial constraints, higher ownership concentration, and state ownership. Overall, our evidence suggests that institutional investors' site visits affect corporate decision-making and further generate social benefits.

Suggested Citation

  • Zhou, Taiyun & Gan, Jiawu, 2022. "Institutional investors' site visits and corporate social responsibility: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:ecmode:v:115:y:2022:i:c:s0264999322002115
    DOI: 10.1016/j.econmod.2022.105965
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