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The Politicization of Social Responsibility

Author

Listed:
  • Todd A. Gormley
  • Manish Jha
  • Meng Wang

Abstract

Institutional investors are less likely to support shareholder proposals involving environmental and social issues for firms headquartered in Republican-led states. The lower support concentrates in recent years, when politicians became more vocal about firms’ social responsibility activities, and among larger institutions and firms, which tend to attract more attention from politicians. Investor support also shifts within states following changes in their leadership. Support for such proposals is 10 percentage points lower in the same state when it is led by Republicans instead of Democrats. The findings suggest that state-level politics and the politicization of an issue impacts institutional investors’ votes.

Suggested Citation

  • Todd A. Gormley & Manish Jha & Meng Wang, 2024. "The Politicization of Social Responsibility," NBER Working Papers 32869, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32869
    Note: CF
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    More about this item

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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