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Institutional ownership stability and corporate social performance

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  • Wang, Kun Tracy
  • Sun, Aonan

Abstract

We examine the influence of institutional ownership stability on corporate social performance (CSP). We find that stable institutional ownership is associated with higher CSP, after controlling for the percentage of institutional ownership. The result is robust to alternative measures of CSP and various techniques to address endogeneity concerns. Additional analysis shows that this positive relation is driven by prudent institutional investors and by CSP dimensions directly pertinent to a specific, primary stakeholder group. Overall, we show that stable institutional investors are an effective mechanism to promote firms’ investment in long-term-oriented activities including CSR.

Suggested Citation

  • Wang, Kun Tracy & Sun, Aonan, 2022. "Institutional ownership stability and corporate social performance," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612322001507
    DOI: 10.1016/j.frl.2022.102861
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    References listed on IDEAS

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