Institutional ownership horizon, corporate social responsibility and shareholder value

Erhemjamts, Otgontsetseg; Huang, Kershen

doi:10.1016/j.jbusres.2019.05.037

Cited by 102 publications

(56 citation statements)

References 65 publications

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“…Environmental investments may lead to higher firm performance in the long run since environmentally irresponsible firms may be subject to punishment from stakeholders and government sanctions (Oh et al 2011;Calza et al 2016). In contrast to the low number of studies on content-driven, socially responsible investors, we recognize an increased amount of research on time-driven, long-term investors and their overall impact on environmental and social performance (e.g., Meng and Wang 2020;Erhemjamts and Huang 2019;Fu et al 2019;Gloßner 2019). Prior studies find that long-term investors, especially institutional investors, strengthen environmental and social performance based on US settings (Meng and Wang 2020;Erhemjamts and Huang 2019;Fu et al 2019;Gloßner 2019;Kim et al 2019a;Lamb and Butler 2018;Boubaker et al 2017;Neubaum and Zahra 2006).…”

Section: Time-driven Long-term Investors and Corporate Environmental Performancementioning

confidence: 96%

“…The proportion of long-term investors determines whether firms are able to make more long-term investments (such as environmentally related investments). Short-term investors do not care much about environmental performance and do not pursue the objective of longterm firm value maximization (Erhemjamts and Huang 2019). Environmental investments may lead to higher firm performance in the long run since environmentally irresponsible firms may be subject to punishment from stakeholders and government sanctions (Oh et al 2011;Calza et al 2016).…”

Section: Time-driven Long-term Investors and Corporate Environmental Performancementioning

confidence: 99%

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Do sustainable institutional investors contribute to firms’ environmental performance? Empirical evidence from Europe

Kordsachia¹,

Focke

Velte

2021

Rev Manag Sci

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In light of current climate change discussions, this paper analyzes the effect of ownership structure on a firm’s environmental performance with a subsequent focus on corporate emission reduction. Based on a cross-national European sample consisting of 7384 firm-year observations between 2008 and 2017, this study explores the relationship between sustainable institutional investors and environmental performance. In line with prior research and embedded in an agency theoretical framework, the nature of institutional investors may act as a stimulating driver towards green business practices. Sustainable institutional investors are defined based on their signatory status to the UN Principles for Responsible Investment and their (long-term) investment horizons. The first classification stems from a content-driven sustainability perspective, while the second is derived from temporal sustainability. The results indicate that sustainable institutional ownership is positively associated with a firm’s environmental performance. Further investigations reveal that sustainable institutional investor ownership is also positively associated with firms’ willingness to respond to the Carbon Disclosure Project. These results indicate a higher carbon-risk awareness in firms with greater sustainable institutional investor ownership. Our paper significantly contributes to prior empirical research on institutional ownership and environmental performance and offers useful theoretical and practical implications. It focusses on a still-underdeveloped research area, namely organizations and their relationships with the natural environment, including institutional equity ownership as a driver towards greener practices on a corporate level.

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Section: Time-driven Long-term Investors and Corporate Environmental Performancementioning

confidence: 96%

Section: Time-driven Long-term Investors and Corporate Environmental Performancementioning

confidence: 99%

Do sustainable institutional investors contribute to firms’ environmental performance? Empirical evidence from Europe

Kordsachia¹,

Focke

Velte

2021

Rev Manag Sci

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“…They found that a higher ratio of long-term institutional ownership benefits CSR results since long-term, sustainable, and active investors strengthen CSR performance and disclosure, which in turn encourages stakeholders to invest in the environmentally sound firm. That is, long-term orientation institutional investors' promotion of CSR eventually improves investment returns for investors (Erhemjamts and Huang 2019). In this regard, family ownership embodies longterm investors, who focus more on CSR performance than short-term shareholders.…”

Section: Further Analysis Of Family Business Effectmentioning

confidence: 99%

Short-Selling and Financial Performance of SMEs in China: The Mediating Role of CSR Performance

Mai

Hamid

2021

IJFS

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The aim of this study is to examine the effect of short-selling deregulation on the financial performance of SMEs in China. The external governance role of short-selling is also tested by adopting corporate social responsibility (CSR) performance as the mediating effect. This study investigates a panel data analysis with a sample of 5038 firm-years of SMEs listed in Shenzhen Stock Exchange from 2010 to 2019. The PSM-DID method is adopted in this study to alleviate self-selection and endogenous problems to observe the comparable pure effect of short-selling deregulation, while the mediation test is conducted based on Baron and Kenny’s model. The finding of this study showed that the existence of short-selling could enhance firm financial performance and the mediating effect of CSR performance position in their relationship. In addition, the further analysis revealed that the mediating effect of CSR is more pronounced for family businesses and firms with high real short-selling threats. The robust test of alternative measurements is conducted and valid. This study provides insights for policymakers to consider further short-selling ban lifting and corporate executives to practice more CSR activities to improve the financial performance. Limitations and further implications of this study are also discussed.

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“…The increasing trend should be a sign that the company is currently paying more attention to matters related to sustainability. However, there are still strong indications that compliance with the sustainability aspect is merely an act of the company in the context of fulfilling obligations and complying with regulations, or even just a desire to get certain awards (Erhemjamts & Huang, 2019;Stanojević et al, 2010). Previous research findings even found the fact that according to investors' perceptions, sustainability reports only reflect the impression of the company's management strategy to bring out the positives of sustainability performance and obscure the negative things of the company.…”

Section: Sustainability Report and Constructionmentioning

confidence: 98%

A comprehensive study on the quality of sustainability reporting disclosure between Indonesia and other countries

Andriadi¹,

Werastuti²

2022

10.5267/j.ac

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The shift in the business paradigm towards a more sustainable one has placed a balance between people, profit and the planet as a corporate culture. However, based on previous empirical studies, very few companies have put sustainability as the soul of their business, especially in the types of industries that are not obliged to report their social responsibility activities. This study aims to compare the quality of the sustainability report based on the GRI G4 indicator for foreign and domestic companies engaged in construction services. The data was taken using a purposive method on construction service companies that published their 2017 sustainability reports and found 30 companies. The quality of the report is compared between the three indicators, namely economic, social and environmental. The results showed that in terms of quality of disclosure, there was no difference between domestic and foreign construction service companies, whether tested per category or tested collectively. The results of this study reinforce the previous finding that companies are still very dependent on the regulatory compliance approach only in implementing sustainability, especially in the construction service industry.

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Institutional ownership horizon, corporate social responsibility and shareholder value

Cited by 102 publications

References 65 publications

Do sustainable institutional investors contribute to firms’ environmental performance? Empirical evidence from Europe

Do sustainable institutional investors contribute to firms’ environmental performance? Empirical evidence from Europe

Short-Selling and Financial Performance of SMEs in China: The Mediating Role of CSR Performance

A comprehensive study on the quality of sustainability reporting disclosure between Indonesia and other countries

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