Driving Value Through Corporate Social Responsibility: The Role of Foreign Institutional Investors

PurposeThe research on the role of corporate social responsibility in investors' decision process has proliferated over the past few decades. This paper aims to explore the mediating role of financial performance in the relationship between corporate social responsibility and institutional investors.Design/methodology/approachPanel regression was performed on a sample of 29 commercial banks nine years from 2009 to 2017.FindingsThe initial findings of the study show that that corporate social responsibility has a positive and significant impact on institutional investors. However, when the interaction term (financial performance) was incorporated, the relationship between CSR and institutional turns out to be neutral. The study concludes that financial performance plays a pivotal role in the selection of investment avenues.Originality/valueIn Indian context, there is a dearth of research work which studies the impact of sustainable practices on investors' decision process. This topic has received wider attention but lacks insights from developing countries, like India. This article presents a new approach to verify the relationship through the mediating variable (financial performance).

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Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms

Sustainability ◽

10.3390/su12010149 ◽

2019 ◽

Vol 12 (1) ◽

pp. 149 ◽

Cited By ~ 5

Author(s):

Rizwan Ali ◽

Muhammad Safdar Sial ◽

Talles Vianna Brugni ◽

Jinsoo Hwang ◽

Nguyen Vinh Khuong ◽

...

Keyword(s):

Corporate Governance ◽

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Performance ◽

Institutional Investors ◽

Stock Exchange ◽

Strategic Decision ◽

Foreign Institutional Investors ◽

Corporate Social ◽

The Relationship

We have performed a focalized investigation to explore how corporate social responsibility (CSR) moderates the relationship between corporate governance and firms’ financial performance. We applied a panel regression to examine this relationship from a sample of 3400 Shanghai Stock Exchange (SSE) listed firms, based on yearly observations from 2009 to 2018. Our results show that the presence of female directors on the board is associated with improved firms’ performance and that corporate social responsibility (CSR) moderates this relation, thus indicating that sharing strategic decision-making with female board members revealed a better relationship between CSR and firms’ financial performance. Our findings showed that foreign institutional investors positively influenced firms’ financial performance and that CSR moderates the relation between foreign institutional shareholders and the firm’s financial performance. Supported by corporate governance theories, such as resource dependence and stakeholder theory, our results help to better understand the nexus among corporate governance, firms’ performance and corporate social responsibility. These findings are advantageous to government departments in emerging countries in terms of encouraging marketing practitioners and participants to implement CSR practices and change the attitude associated with CSR implications. This study highlighted the problems of the foreign institutional investors’ scheme, which was the main contribution to the financial market reform of China after 2003. These findings offer significant implications to corporate affairs executives and managers, practitioners, academicians, state officials, and policy-makers, and might provide China with the opportunity to extend its market liberalization to the global markets. This research also contributes to the existing literature, which investigates how CSR moderates the relationship between corporate governance and firms’ financial performance in the Chinese market context.

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Industry and Community Peers as Drivers of Corporate Social Responsibility in India: The Contingent Role of Institutional Investors

Journal of Cleaner Production ◽

10.1016/j.jclepro.2021.126316 ◽

2021 ◽

pp. 126316

Author(s):

Shaili Singh ◽

Arpita Khare ◽

Shivendra Kumar Pandey ◽

Dheeraj P. Sharma

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Institutional Investors ◽

Corporate Social

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Ownership and corporate social responsibility in Indian firms

Social Responsibility Journal ◽

10.1108/srj-02-2017-0030 ◽

2017 ◽

Vol 13 (4) ◽

pp. 714-727 ◽

Cited By ~ 6

Author(s):

Vidya Sukumara Panicker

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Institutional Investors ◽

Family Firms ◽

Individual Investors ◽

Content Type ◽

Heterogeneous Behavior ◽

Domestic Banks ◽

Corporate Social

Purpose The purpose of this paper is to look at the association between different ownership categories and corporate social responsibility (CSR) spending of selected Indian firms. Design/methodology/approach Random-effects Tobit panel regression is performed on a panel of 4,388 firm years of 1,722 unique firms over a three-year period (2014-2016). Findings Different categories of institutional investors have different preferences for CSR spending of a firm. Promoters of business-group affiliated and unaffiliated firms also behave differently towards CSR activities of their firms. Research limitations/implications Heterogeneous behavior of institutional investors is revealed through the study. Foreign institutions and domestic banks are supportive of CSR investments of a firm. Promoters of family firms and group affiliates also diligently plan CSR activities. Practical implications Managers cannot ignore the heterogeneities of institutional investors in their investment decisions. Individual investors can align their philanthropic preferences with those of different types of institutional investors or firms. Social implications Family-owned firms play a significant role in CSR activities of emerging economies, while individual promoters are not as attracted by the reputational prospects of CSR. Originality/value This paper considers the role of heterogeneities of institutional investors in influencing CSR spending of emerging-economy firms. This heterogeneity has not been previously studied in this context.

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