TY - JOUR
T1 - Does Social Performance Influence Breadth of Ownership?
AU - Kim, Jeong-Bon
AU - Li, Bing
AU - Liu, Zhenbin
PY - 2018/10
Y1 - 2018/10
N2 - This study examines the hitherto unexplored question of whether and how a firm's social performance influences the breadth of that firm's share ownership. We predict and find that firms with higher corporate social responsibility (CSR) ratings attract more institutional investors (especially long‐term, low‐stake and green institutional investors) and more individual investors. This finding is consistent with the notion that investors are more interested in firms with higher CSR ratings and thus prefer to hold stocks of such firms. We also find that firms with higher CSR ratings are associated with higher stock liquidity, lower cost of equity capital, more equity and debt issuance, and greater investment, and that sin stocks are associated with a lower investor base, which further corroborates our prediction. Our results are robust to potential endogeneity, the use of alternative model specifications, and an alternative proxy for CSR performance.
AB - This study examines the hitherto unexplored question of whether and how a firm's social performance influences the breadth of that firm's share ownership. We predict and find that firms with higher corporate social responsibility (CSR) ratings attract more institutional investors (especially long‐term, low‐stake and green institutional investors) and more individual investors. This finding is consistent with the notion that investors are more interested in firms with higher CSR ratings and thus prefer to hold stocks of such firms. We also find that firms with higher CSR ratings are associated with higher stock liquidity, lower cost of equity capital, more equity and debt issuance, and greater investment, and that sin stocks are associated with a lower investor base, which further corroborates our prediction. Our results are robust to potential endogeneity, the use of alternative model specifications, and an alternative proxy for CSR performance.
KW - breadth of ownership
KW - corporate social responsibility (CSR)
KW - green investor
KW - investor base
KW - liquidity
KW - stock
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UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-85051124888&origin=recordpage
U2 - 10.1111/jbfa.12341
DO - 10.1111/jbfa.12341
M3 - RGC 21 - Publication in refereed journal
SN - 0306-686X
VL - 45
SP - 1164
EP - 1194
JO - Journal of Business Finance & Accounting
JF - Journal of Business Finance & Accounting
IS - 9-10
ER -