Mandatory corporate social responsibility and foreign institutional investor preferences

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This study examines whether the heterogeneity among foreign institutional investors (FIIs) matters when investing in socially responsible investee firms. Exploiting a mandated corporate social responsibility (CSR) regulation in India and using manually collected CSR expenditure data, the results of a quasi-natural experiment confirm that firms that comply with the CSR mandate attract greater investment from FIIs. This positive nexus holds for both existing and new FIIs. However, the heterogeneity of FIIs plays a significant moderating role because FIIs from civil law origin countries and those considered to be independent and long-term investors invest more in mandated CSR firms.
Original languageEnglish
Article number102261
Number of pages25
JournalJournal of Corporate Finance
Early online date4 Aug 2022
Publication statusPublished - 31 Oct 2022


  • CSR
  • foreign institutional investors
  • legal origin
  • independent and long-term investors
  • ESG


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