Institutional Ownership and Corporate Social Performance: Empirical Evidence from Indonesian Companies

Abstract

Prior research on the relationships of institutional ownership and corporate social responsibilityhas focused on North American (U.S. and Canada) and European companies. With the passageof Indonesian Law No. 40 in 2007, Indonesian companies are now obligated to conduct CSP.As these companies objected to the passage of this law, awareness of how CSP may benefitIndonesian companies in terms of its positive impact on institutional investors needs to be investigated.Thus, this paper examines the relationships of IO and CSP for Indonesian companies.Unfortunately, contrary to the results for North American and European companies, wefound no relationships between institutional ownership and corporate social responsibility forIndonesian companies. This finding suggests that most institutional investors do not includeCSP as part of their investment decisions. Copyright © www.iiste.org