Abstract
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.
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