Which Institutional Investors Drive Corporate Sustainability?: A Systematic Literature Review

Patrick Velte

doi:10.1002/bse.3117

Which Institutional Investors Drive Corporate Sustainability? A Systematic Literature Review

Patrick Velte

Research output: Journal contributions › Scientific review articles › Research

145 Citations (Scopus)

Abstract

In this article, we review recent archival research (66 studies) on the influence of institutional ownership (IO) heterogeneity on corporate sustainability. Relying on an agency-theoretical framework, we differentiate between various types of IO and their nature. We found that most prior research concentrates on the impact of IO heterogeneity on corporate sustainability performance. Long-term, sustainable, and foreign IO leads to better ESG/CSR outputs. Based on the business case argument for corporate sustainability, long-term institutional investors moderate the positive link between corporate sustainability and future financial performance. We provide useful recommendations for future research by focusing on endogeneity concerns as methodological challenges and content-related proposals for future research designs.

Original language	English
Journal	Business Strategy and the Environment
Volume	32
Issue number	1
Pages (from-to)	42-71
Number of pages	30
ISSN	0964-4733
DOIs	https://doi.org/10.1002/bse.3117
Publication status	Published - 01.2023

Bibliographical note

Funding Information:
Open access funding enabled and organized by Projekt DEAL.

Publisher Copyright:
© 2022 The Author. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure
SDG 12 Responsible Consumption and Production

Research areas and keywords

Sustainability Science
Management studies
agency theory
corporate goverannce
corporate social responsibility
institutional investors
institutional ownership
monitoring

ASJC Scopus Subject Areas

Strategy and Management
Geography, Planning and Development
Business and International Management
Management, Monitoring, Policy and Law

Access to Document

10.1002/bse.3117Licence: CC BY

Cite this

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title = "Which Institutional Investors Drive Corporate Sustainability?: A Systematic Literature Review",

abstract = "In this article, we review recent archival research (66 studies) on the influence of institutional ownership (IO) heterogeneity on corporate sustainability. Relying on an agency-theoretical framework, we differentiate between various types of IO and their nature. We found that most prior research concentrates on the impact of IO heterogeneity on corporate sustainability performance. Long-term, sustainable, and foreign IO leads to better ESG/CSR outputs. Based on the business case argument for corporate sustainability, long-term institutional investors moderate the positive link between corporate sustainability and future financial performance. We provide useful recommendations for future research by focusing on endogeneity concerns as methodological challenges and content-related proposals for future research designs.",

keywords = "Sustainability Science, Management studies, agency theory, corporate goverannce, corporate social responsibility, institutional investors, institutional ownership, monitoring, agency theory, corporate governance, corporate social responsibility, institutional investors, institutional ownership, monitoring",

author = "Patrick Velte",

note = "Funding Information: Open access funding enabled and organized by Projekt DEAL. Publisher Copyright: {\textcopyright} 2022 The Author. Business Strategy and The Environment published by ERP Environment and John Wiley \& Sons Ltd.",

year = "2023",

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N2 - In this article, we review recent archival research (66 studies) on the influence of institutional ownership (IO) heterogeneity on corporate sustainability. Relying on an agency-theoretical framework, we differentiate between various types of IO and their nature. We found that most prior research concentrates on the impact of IO heterogeneity on corporate sustainability performance. Long-term, sustainable, and foreign IO leads to better ESG/CSR outputs. Based on the business case argument for corporate sustainability, long-term institutional investors moderate the positive link between corporate sustainability and future financial performance. We provide useful recommendations for future research by focusing on endogeneity concerns as methodological challenges and content-related proposals for future research designs.

AB - In this article, we review recent archival research (66 studies) on the influence of institutional ownership (IO) heterogeneity on corporate sustainability. Relying on an agency-theoretical framework, we differentiate between various types of IO and their nature. We found that most prior research concentrates on the impact of IO heterogeneity on corporate sustainability performance. Long-term, sustainable, and foreign IO leads to better ESG/CSR outputs. Based on the business case argument for corporate sustainability, long-term institutional investors moderate the positive link between corporate sustainability and future financial performance. We provide useful recommendations for future research by focusing on endogeneity concerns as methodological challenges and content-related proposals for future research designs.

KW - Sustainability Science

KW - Management studies

KW - agency theory

KW - corporate goverannce

KW - corporate social responsibility

KW - institutional investors

KW - institutional ownership

KW - monitoring

KW - agency theory

KW - corporate governance

KW - corporate social responsibility

KW - institutional investors

KW - institutional ownership

KW - monitoring

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DO - 10.1002/bse.3117

M3 - Scientific review articles

SN - 0964-4733

VL - 32

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EP - 71

JO - Business Strategy and the Environment

JF - Business Strategy and the Environment

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