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Can Passive Investors Improve Corporate Social Responsibility? Evidence from Chinese Listed Firms

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  • Lili Fu
  • Liyuan Pan
  • Jingmei Zhao

Abstract

Using Hexun’s CSR rating data from 2010 to 2020 for Chinese firms, this study finds a positive relationship between index fund ownership and corporate social responsibility, and this enhancement is significantly stronger in firms in competitive industries. After controlling for endogeneity and exploiting a series of robustness checks, the results remain unchanged. The mechanisms by which index funds influence corporate social responsibility could be their long investment horizon and attraction for analyst coverage. This study provides new empirical evidence on the positive governance effect of passive investors from a CSR perspective.

Suggested Citation

  • Lili Fu & Liyuan Pan & Jingmei Zhao, 2023. "Can Passive Investors Improve Corporate Social Responsibility? Evidence from Chinese Listed Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(2), pages 404-419, January.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:2:p:404-419
    DOI: 10.1080/1540496X.2022.2103404
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    Cited by:

    1. Yixuan Chen & Shanyue Jin, 2023. "Corporate Social Responsibility and Green Technology Innovation: The Moderating Role of Stakeholders," Sustainability, MDPI, vol. 15(10), pages 1-20, May.
    2. Wennanxiang Wang & Ridong Hu & Cheng Zhang & Yang Shen, 2023. "Does Socially Responsible Investing Make a Better Society?—A Micro Perspective through Mutual Funds and Their Investee Companies," Sustainability, MDPI, vol. 15(11), pages 1-20, May.
    3. Changchun Zhu & Na Li & Jing Ma & Xiaobin Qi, 2024. "CEOs' digital technology backgrounds and enterprise digital transformation: The mediating effect of R&D investment and corporate social responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2557-2573, May.

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