Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/329627 
Year of Publication: 
2025
Series/Report no.: 
New Working Paper Series No. 362
Publisher: 
University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State, Chicago, IL
Abstract: 
Does shareholder visibility affect firms' prosocial behavior? What implications for other shareholders? Exploiting quasi-experimental variation from media coverage around Annual General Meetings and major crises (COVID-19 pandemic and Russian invasion of Ukraine), we show that prominent shareholders support costly prosocial initiatives when these yield reputational benefits. In contrast, less-visible financial blockholders oppose such expenditures at their portfolio firms and prefer to act themselves. Prosocial actions driven by reputational motives reduce investment, productivity, and profits by 1 - 3%, imposing costs on other shareholders. Our findings reveal new implications for minority investors of unobservable intra-shareholder conflicts that emerge when examining shareholder incentives.
Subjects: 
shareholder value
wealth
conflict
warm glow
reputation
exit and voice
social responsibility
charitable donations
covid
Ukraine
Russia
JEL: 
G32
G41
M14
Document Type: 
Working Paper

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