Responses of institutional investors corporate to social performance measures

This study represents a first attempt to empirically examine the impact of data relating to corporate social performance (CSP) on institutional ownership. Findings, though not statistically significant, are consistent with the hypothesis that institutional investors increase ownership when CSP data are positive and, minimally, do not decrease investment. Additionally, although fewer institutions invest in the on-average smaller and more highly-leveraged firms in the socially responsible group, institutions invest in about the same percent of overall equity, suggesting that they may be making some sort of risk trade-off.