An Empirical Examination of Institutional Investor Preferences for Corporate Social Performance
Paul Cox
Stephen Brammer
Andrew Millington
ABSTRACT: This study investigates the pattern of institutional shareholding in the U.K. and its relationship with socially responsible behavior by companies within a sample of over 500 UK companies. We estimate a set of ownership models that distinguish between long- and short-term investors and their largest components and which incorporate both aggregated and disaggregated measures of corporate social performance (CSP). The results suggest that long-term institutional investment is positively related to CSP providing further support for earlier studies by Johnson and Greening (1999, Academy of Management Journal 42, 564–576) and Graves and Waddock (1994, Academy of Management Journal 37, 1034–1046). Disaggregation of CSP into its constituent components suggests that the pattern of institutional investment is also related to the form which CSP takes. Investigation of the impact of investment screens on the selection of stocks suggests that long-term institutional investors select primarily through exclusion, rejecting those firms which have the worst CSP.
KEY WORDS: institutional investment, corporate social performance, socially responsible investment
Introduction
The recent evolution of the pattern of ownership of the stock of large corporations is marked by two significant trends. First, the extent to which the common stock of companies has come to be owned by institutions, such as pension and mutual funds, rather than individual investors has risen dramatically over the last 25 years (National Statistics, 2002; Ryan and Schneider, 2002; Useem, 1996). Second, the rapid growth of the socially responsible investment (SRI) movement has stimulated interest in aspects of corporate behavior other than those directly associated with corporate financial performance (Social Investment Forum, 2002a; Sparkes, 2000; UK Social Investment Forum, 2003). These developments have prompted researchers to examine the link between corporate social performance (CSP) and the extent of institutional ownership in company stock (Coffey and Fryxell, 1991; Graves and Waddock, 1994).
The growth in individual institutional shareholdings has both increased the visibility of institutional investors and reduced the flexibility of institutions to exit investments without significantly damaging their value. It has been hypothesized that these developments may have resulted in an increase in shareholder activism and greater focus on longterm returns (Graves and Waddock, 1994; Johnson and Greening, 1999). At the same time, institutional investors have come under increasing pressure to encompass social performance in investment selection. Recent evidence suggests that SRI accounts for a significant proportion of total investment in both the U.S. and the U.K. For example, the Social Investment Forum estimated that US$2.3 trillion of social funds were under management in the U.S. in 2001,equivalent to one in every eight dollars under professional management, while the corresponding amount invested in U.K. social funds in the U.K. stood at approximately pound;25 bn in 2000 (SustainAbility, 2000). However, while specialized SRI investment instruments have developed in both countries, the legal and institutional framework through which institutional investors view CSP differs significantly between the U.K. and the US. In particular, long-run institutional investors (e.g. Pension Funds, Life Assurance Companies) have become subject to regulatory and institutional social investment requirements in the U.K. (Association of British Insurers, 2001; Local Authority Pension Fund Forum, 2002; National Association of Pension Funds, 2002; Occupational Pension Schemes, 1999). The developments in the U.K. suggest both that the study of SRI should encompass broad institutional categories as well as specialist SRI funds, since both pension and life assurance finds have become subject to legal and institutional requirements, and that significant differences may exist in the holdings of long-run institutional investors based on the incidence and level of CSP and the institutional and legal framework within which investment decisions are made.
Relatively few studies have considered the relationship between social performance and the holdings of different types of institutional shareholder and all of these are based on U.S. data. Graves and Waddock (1994) find that the number of institutional investors in a corporationrsquo;s stock is positively related to firm social performance within a model that draws on efficient markets theory (Fama, 1970) supporting earlier work by Coffey and Fryxell (1991). Johnson and Greening (1999) place the analysis within agency theory but also find a positive relationship between pension fund investment and two aspects of social performance, a people dimension (community, women and minorities, employee relations) and a product quality dimension (environment, product quality).
This paper extends and develops the existing literature in three ways:
(1)The paper investigates the impact of CSP on the pattern of institutional investment in the U.K. within a set of ownership models that distinguish between long- and short-term investors and their largest components (Pension Funds, Life Assurers, Charities, Unit Trusts, and Investment Trusts). The study therefore provides an investigation of the relationship between institutional investment and CSP within a fundamentally different institutional and regulatory environment. In so doing, the analysis sheds light on the preferences of institutional investors for CSP as revealed in the pattern of their investments. The use of disaggregated ownership data permits the exploration of disparities in behavior be
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对机构投资者对企业社会绩效的偏好进行实证研究
保罗·考克斯
斯蒂芬·布拉姆
安德鲁·米林顿
摘要:本研究调查了英国公司在英国的机构持股模式及其与社会责任行为之间的关系在一个样本的500多家英国公司。我们估计一组ownership模型区分长期和短期投资者和他们最大的组件并将聚合和分解企业社会绩效指标(CSP)。研究结果表明,长期的机构投资与CSP积极相关,为约翰逊和格里宁(1999年,管理学会期刊,42,564—576)和格雷夫斯和瓦德多克(1994年,管理学会期刊,37,1034—1046)提供了进一步的支持。将CSP分解为其组成成分表明,机构投资的模式也与CSP所采用的形式有关。对投资屏幕对股票选择的影响的调查表明,一个长期的机构投资者主要是通过排斥来选择,拒绝那些拥有最糟糕的CSP的公司。
关键词:机构投资、企业社会绩效、社会责任投资
介绍
最近大公司股票所有权模式的演变是由两大趋势发展而来的。首先,在过去的25年里,养老金和共同基金等机构所欠的公司普通股,而不是个人投资者,已经急剧上升(国家统计,2002;瑞安和施耐德,2002;乌西姆,1996)。其次,社会责任投资(SRI)运动的快速增长激发了人们对企业行为方面的兴趣,而不是与公司财务业绩相关的直接关系(社会投资论坛,2002a;Sparkes,2000;英国社会投资论坛,2003).这些发展促使研究人员研究了企业社会绩效(CSP)以及公司股票的机构地位(科菲和厄律克,1991年;格雷夫斯和瓦多克,1994年)之间的联系。
个人机构持股的增长既提高了机构投资者的知名度,也降低了机构在不显著损害其价值的情况下退出投资的灵活性。据推测,这些发展可能导致股东维权行动的增加和对长期回报的关注(格雷夫斯和沃德多克,1994年;约翰逊和格林,1999年)。与此同时,机构投资者面临着越来越大的压力,要求他们将社会绩效纳入投资选择。最近,有证据表明,在美国和英国的总投资中,SRI占了相当大的比例。例如,社会投资论坛估计,2001年,美国有2.3万亿美元的社会基金在管理,相当于每8美元在专业管理下的1美元,而在英国的英国社会基金中则有相应的投资金额,而2000年,英国在英国的社会基金投入了大约250亿英镑(可持续性,2000年)。然而,尽管这两个国家都已开发出专门的SRI投资工具,但机构投资者对CSP的法律和制度框架在英国和美国之间有着显著的不同。特别是,在英国(英国保险协会,2001年;地方当局养老基金论坛,2002年;全国养老基金协会,2002年;职业养老计划,1999年),长期机构投资者(如养老基金、人寿保险公司)已成为监管和机构社会投资要求的对象。英国的发展表明,因为养老金和人寿保险都已成为法律和制度要求的对象,对SRI的研究应该包括广泛的机构类别以及专业的SRI基金,而且,基于CSP的发生率和水平,以及投资决策的制度和法律框架,长期机构投资者的持股可能存在显著差异。
相对较少的研究考虑了社会绩效与不同类型机构股东的持股之间的关系,所有这些都是基于美国的数据。格雷夫斯和瓦德多克(1994年)发现,公司股票的机构投资者的数量与公司的社会绩效有积极的关系,这种模式借鉴了有效市场理论(法玛,1970年),支持科菲和弗瑞克塞尔(1991年)的早期工作。约翰逊和格里宁(1999年)将分析放在机构理论中,但也发现了养老基金投资与社会绩效的两个方面的积极关系,一个人的维度(社区,女性和少数名族,员工关系)和产品质量维度(环境,产品质量)。
本文以三种方式扩展和发展现有文献:
- 本论文调查了CSP对英国机构投资模式的影响,在一套所有权模式中,区分长期和短期投资者及其最大的组成部分(养老基金、寿险基金、慈善机构、单位信托基金和投资信托基金)。因此,该研究在一个完全不同的制度和监管环境下,对机构投资与CSP之间的关系进行了调查。在这样做的过程中,分析揭示了机构投资者对CSP的偏好,正如他们的投资模式所揭示的那样。使用分类所有权数据,可以探索长期和短期投资者行为之间的差异,以及监管和机构社会投资需求差异对机构所有权模式的影响。这种类型的概念是建立在最近的概念工作之上的,它强调了机构投资者的多样性,并认为机构投资者的行为是由一系列复杂的特征决定的(Ryan和施耐德,2002年)。
- 尽管人们认识到,稳固的社会表现是一种基本的多维结构(卡罗尔,1979年),社会表现的多样性只是在现有的实证研究中得到了部分的检验(Cofey 和Fryxell,1991;约翰逊和格林,1999)。本研究中的分析采用了聚合的CSP结构,同时也采用了社会责任的社区、环境和员工关系维度的单独度量。这使得分析能够调查不同机构投资者的偏好是否因CSP的不同维度而异。
- 现有的研究对CSP与机构投资者行为联系在一起的过程几乎没有提及。一些研究表明,机构投资者使用的屏幕可以根据公司的社会表现(巴内特和所罗门,2002年)来区分可接受的和不可接受的股票。我们的方法通过包含一些虚拟变量来测试这种可能性,这些变量突出显示了公司的最佳和最差的社会表现。
保罗·考克斯是巴斯大学的研究教学助理。他的博士研究考察了机构投资的模式。
斯蒂芬·布拉姆是巴斯大学管理学讲师。他目前的研究集中在企业社会和政治活动的经验方面。他最近出版的著作包括商业伦理与商业伦理杂志的论文:一份欧洲评论。
安德鲁·米林顿是巴斯大学的管理学讲师。他目前的研究集中在企业慈善和政治捐款的动机和管理上。他的出版物包括国际商业杂志、管理国际评论、国际商业评论和商业道德杂志。
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