Abstract
This study examines the relationship between institutional ownership and the corporate social responsibility (CSR) performance of companies in India. Referring to social market theory, the free cash flow theory of agency costs and the institutional theory of CSR, this study hypothesized a positive association between institutional ownership and CSR performance (CSP). It empirically tested the hypothesis on a sample of 814 firm-years from 2010 to 2019. The findings reveal a significantly positive association between institutional ownership persistence and CSP. The robustness of the findings is tested against the heterogeneity of institutional ownership, namely, domestic and foreign institutional ownership, with reference to the ‘hometown advantage hypothesis’ and ‘global investor hypothesis’. Domestic institutional ownership significantly impacts CSP in line with the ‘hometown advantage hypothesis’; meanwhile, the significant influence of foreign institutional ownership on CSR aligns with the ‘global investor hypothesis’.
Published Version
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