Exploring the moderating effect of financial performance on the relationship between corporate environmental responsibility and institutional investors: some Egyptian evidence
✍ Scribed by Hayam Wahba
- Publisher
- John Wiley and Sons
- Year
- 2008
- Tongue
- English
- Weight
- 91 KB
- Volume
- 15
- Category
- Article
- ISSN
- 1535-3958
- DOI
- 10.1002/csr.177
No coin nor oath required. For personal study only.
✦ Synopsis
Abstract
Much of the existing literature has argued that those firms that invest in environmental initiatives attract more institutional investors. A noticeable problem with these studies is the assumption that the relationship between institutional investors and corporate environmental responsibility is a monotonic relationship that does not vary with firm financial performance. Initial findings of this study demonstrated that corporate environmental responsibility exerted a positive and significant coefficient on institutional ownership. However, when an interaction term between environmental responsibility and financial performance was included, the results verified that corporate environmental responsibility has a neutral impact on the preferences of institutional investors. Moreover, by classifying firms into two sub‐groups, according to their financial performance, environmental responsibility was found to have a positive and significant impact on institutional ownership only when financial performance is high. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.