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NGO activism, legitimacy, and shareholder value

Hoepner, Andreas, Li, Qian ORCID: and Mayer, Colin 2019. NGO activism, legitimacy, and shareholder value. Presented at: 79th Annual Meeting of the Academy of Management (AOM 2019), Boston, MA, USA, 9-13 August 2019. Academy of Management Proceedings. , vol.2019 (1) 10.5465/AMBPP.2019.17269abstract

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Non-governmental organisations (NGOs) have significantly increased attempts at advocacy for corporate policy adoption and responsible business practices. Using a large NGO dataset that comprises approximately 7,000 NGO activist groups on more than 700 environmental, social and governance (ESG) issues all over the world, this study focuses on the motivations of NGO activism and estimates its impact on firm’s management practices and long-term financial performance. Using propensity score matching to select two homogeneous groups of firms that are or are not NGO targets, we find that firms with large size, poor share performance and poor environmental performance are more likely targeted by NGOs. Following one year and two years periods after NGO campaigns, the firm’s environmental performance score on average increases by 2.2 and 2.9, respectively. Based on a quasi-natural experiment that exploits the implementation of mandatory legislative acts on climate change issues in the UK, we find that NGO engaged firms are more responsive to mandatory legislative acts than NGO non- engaged firms, and such responsiveness is shown by improved environmental performance and firm value following the legislative shock.

Item Type: Conference or Workshop Item (Paper)
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
ISSN: 0065-0668
Last Modified: 12 Nov 2022 02:07

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