Institutional investors, corporate social responsibility, and stock price performance

Elizabeth Marie Motta, Konari Uchida

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

In 2006, the United Nations Global Compact launched Principles for Responsible Investment (PRI), and the Japanese Ministry of Environment advocated financial mechanisms for environmental protection. We find that institutional ownership in 2005 is positively related to the probability of subsequent improvements in environment ratings for Japanese firms. The result is especially evident for domestic institutional shareholders who signed up for the PRI. These results suggest that soft laws aimed at institutional investors can enhance responsible business practices and that national government initiatives play an effective role. Finally, improved ratings in the environment category do not harm shareholder wealth.

Original languageEnglish
Pages (from-to)91-102
Number of pages12
JournalJournal of the Japanese and International Economies
Volume47
DOIs
Publication statusPublished - Mar 2018

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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