Do Local Social Norms Affect Investors’ Involvement in Social Activism? Revisiting the Case of US Institutional Investors
50 Pages Posted: 4 May 2020
Date Written: April 8, 2020
Evidence provided by Dyck et al. (2019) suggests that, in contrast to European investors, local norms related to environmental and social (E&S) beliefs do not affect the willingness of US institutional investors to push for E&S improvements in US firms. We revisit this issue except, instead of measuring E&S social norms at the country level, we allow E&S social norms to vary between states. We find that the shareholdings of non-local US institutional investors from states with strong E&S social norms are positively related to E&S-related shareholder activism, indicating that local E&S social norms do matter for US institutional investors.
Keywords: Social Activism, Local Norm, Institutional Investors
JEL Classification: G02, G23, G30
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