Mandatory corporate social responsibility and foreign institutional investor preferences
Mandatory corporate social responsibility and foreign institutional investor preferences
This study examines whether the heterogeneity among foreign institutional investors (FIIs) matters when investing in socially responsible investee firms. Exploiting a mandated corporate social responsibility (CSR) regulation in India and using manually collected CSR expenditure data, the results of a quasi-natural experiment confirm that firms that comply with the CSR mandate attract greater investment from FIIs. This positive nexus holds for both existing and new FIIs. However, the heterogeneity of FIIs plays a significant moderating role because FIIs from civil law origin countries and those considered independent and long-term investors invest more in mandated CSR firms.
CSR, foreign institutional investors, legal origin, independent and long-term investors, ESG
Marshall, Andrew
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Rao, Sandeep
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Roy, Partha P.
8d91f779-7984-4da3-a6b7-0fb44d132d0a
Thapa, Chandra
ca7197b3-8793-4bba-b675-3c9dc589996c
9 August 2022
Marshall, Andrew
d93b48e1-6383-440b-9053-7a5eec973046
Rao, Sandeep
8473bf53-1177-4fe1-926f-c0afd5492696
Roy, Partha P.
8d91f779-7984-4da3-a6b7-0fb44d132d0a
Thapa, Chandra
ca7197b3-8793-4bba-b675-3c9dc589996c
Marshall, Andrew, Rao, Sandeep, Roy, Partha P. and Thapa, Chandra
(2022)
Mandatory corporate social responsibility and foreign institutional investor preferences.
Journal of Corporate Finance, 76, [102261].
(doi:10.1016/j.jcorpfin.2022.102261).
Abstract
This study examines whether the heterogeneity among foreign institutional investors (FIIs) matters when investing in socially responsible investee firms. Exploiting a mandated corporate social responsibility (CSR) regulation in India and using manually collected CSR expenditure data, the results of a quasi-natural experiment confirm that firms that comply with the CSR mandate attract greater investment from FIIs. This positive nexus holds for both existing and new FIIs. However, the heterogeneity of FIIs plays a significant moderating role because FIIs from civil law origin countries and those considered independent and long-term investors invest more in mandated CSR firms.
Text
1-s2.0-S0929119922001043-main
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More information
Accepted/In Press date: 31 July 2022
e-pub ahead of print date: 4 August 2022
Published date: 9 August 2022
Keywords:
CSR, foreign institutional investors, legal origin, independent and long-term investors, ESG
Identifiers
Local EPrints ID: 476598
URI: http://eprints.soton.ac.uk/id/eprint/476598
ISSN: 0929-1199
PURE UUID: 2e656948-2944-4875-a121-acc606861469
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Date deposited: 09 May 2023 17:06
Last modified: 17 Mar 2024 04:20
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Contributors
Author:
Andrew Marshall
Author:
Sandeep Rao
Author:
Partha P. Roy
Author:
Chandra Thapa
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