Active Ownership

Elroy Dimson; Oğuzhan Karakaş; Xi Li

doi:10.1093/rfs/hhv044

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Active Ownership

Elroy Dimson^1,2; Oğuzhan Karakaş³; Xi Li^4,5

¹ University of Cambridge · ² London Business School · ³ Boston College · ⁴ Temple College · ⁵ Temple University

Review of Financial Studies 2015 open access

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.

DOI: 10.1093/rfs/hhv044
Volume: 28 (12)
Pages: 3225-3268
Language: en
Export: BibTeX
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