Socially Responsible Institutions and Corporate Social Responsibility

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2024-07-08

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en

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Socially Responsible Investing (SRI) has become a part of mainstream investment decision making. However, while their goal is to enable the green economic transition and pressure management of the companies in which they invest to improved CSR-performance, little is known about their actual impact on those social and environmental parameters. This study is an attempt to provide more insight into the relationship between socially responsible investors and CSR-performance by examining the question whether socially responsible institutional investors influence the CSR-performance of portfolio companies? Using a unique manually constructed dataset of 1,629 European listed companies with 13,382 unique institutional investors this study answers the question by analyzing the data using Fixed Effects models with robust standard errors. Endogeneity and causality concerns plague this line of research. To mitigate this, an instrumental variable approach is applied among other robustness tests. While no causal relationship is claimed this study finds support for a positive relationship between socially responsible investors and CSR-performance of the companies in which they invest.

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Faculteit der Managementwetenschappen

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