Active Ownership
- Send correspondence to Elroy Dimson, Newton Centre for Endowment Asset Management, Judge Business School, University of Cambridge, Trumpington Street, Cambridge CB2 1AG, U.K. and London Business School, Regent's Park, London NW1 4SA, U.K.; telephone: +44-20-7000-8212. E-mail: edimson{at}london.edu.
Abstract
We analyze an extensive proprietary database of corporate social responsibility engagements with U.S. public companies from 1999–2009. Engagements address environmental, social, and governance concerns. Successful (unsuccessful) engagements are followed by positive (zero) abnormal returns. Companies with inferior governance and socially conscious institutional investors are more likely to be engaged. Success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes. Collaboration among activists is instrumental in increasing the success rate of environmental/social engagements. After successful engagements, particularly on environmental/social issues, companies experience improved accounting performance and governance and increased institutional ownership.
JEL codes
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