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.
Acknowledgments
The author, Lili Fu, would like to acknowledge the financial support from National Natural Science Foundation of China (71903155, 71873108, 71872150) for this research.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Notes
1. See Shanghai Stock Exchange website: http://www.sse.com.cn/lawandrules/sserules/listing/stock/c/c_20150912_3985851.shtml
2. See Shenzhen Stock Exchange: http://www.szse.cn/disclosure/notice/general/t20060925_499697.html
3. According to Notice on completing 2013 Annual Report of Listed Companies from the Shanghai Stock Exchange: http://www.sse.com.cn/aboutus/mediacenter/hotandd/c/c_20150912_3988733.shtml and Notice on Completing the 2012 Annual Report of Listed Companies from the Shenzhen Stock Exchange: http://www.szse.cn/disclosure/notice/general/t20121231_501057.html
4. According to detailed rating rules of Hexun website: http://stock.hexun.com/2013/gsshzr/index.html
5. Observations here are 22,329 instead of 22,581 because we use leading term of our dependent variables. Detailed summary statistics can be viewed in .