Do Local Social Norms Affect Investors’ Involvement in Social Activism? Revisiting the Case of US Institutional Investors

50 Pages Posted: 4 May 2020

See all articles by Steven F. Cahan

Steven F. Cahan

University of Auckland Business School

Chen Chen

Monash University - Department of Accounting

Lily Chen

University of Auckland Business School

Date Written: April 8, 2020

Abstract

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

Suggested Citation

Cahan, Steven F. and Chen, Chen and Chen, Lily, Do Local Social Norms Affect Investors’ Involvement in Social Activism? Revisiting the Case of US Institutional Investors (April 8, 2020). Available at SSRN: https://ssrn.com/abstract=3571199 or http://dx.doi.org/10.2139/ssrn.3571199

Steven F. Cahan

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Chen Chen (Contact Author)

Monash University - Department of Accounting ( email )

Building H, Level 3
Caulfield campus
Melbourne, Victoria 3800
Australia

Lily Chen

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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