State pension funds and corporate social responsibility: do beneficiaries’ political values influence funds’ investment decisions?

This study explores the underlying drivers of US public pension funds’ tendency to tilt their portfolios towards companies with stronger corporate social responsibility (CSR). Studying the equity holdings of large, internally-managed US state pension funds, we find evidence that the political leaning of their beneficiaries and political pressures by state politicians affect funds’ investment decisions. State pension funds from states with Democratic-leaning beneficiaries tilt their portfolios more strongly towards companies that perform well on CSR issues, and this tendency is intensified when the state government is dominated by Democratic state politicians. Moreover, we find that funds which tilt their portfolios towards companies with superior CSR scores generate a slightly higher return compared with their counterparts. Overall, our findings indicate that funds align their investment choices with the financial and non-financial interests of their beneficiaries when deciding whether to incorporate CSR into their equity allocations

Tiebreaker: Certification and Multiple Credit Ratings

Bongaerts is with Finance Group, RSM Erasmus University Rotterdam, and Cremers and Goetzmann are with the International Center for Finance, Yale University. We would like to thank Patrick Behr; Michael Brennan; Mark Carlson; Erwin Charlier; Long Chen; Frank de Jong; Joost Driessen; Frank Fabozzi; Rik Frehen; Gary Gorton; Jean Helwege; Mark Huson; Ron Jongen; Pieter Klaassen; David Lesmond; Hamid Mehran; Catherine Nolan; Frank Packer; Ludovic Phalippou; Paolo Porchia; Jörg Rocholl; Joao Santos; Joel Shapiro; Chester Spatt; Walter Stortelder; Dan Swanson; Anjan Thakor; Laura Veldkamp; Evert de Vries; Jacqueline Yen; Weina Zhang; as well as conference participants at the Financial Crisis conference at Pompeu Fabra University, the European Finance Association annual meetings in Bergen (Norway, 2010), the Texas Finance Festival at UT Austin, the RMI conference at National University of Singapore, the NBER meeting on Credit Ratings in Cambridge, the Conference on Credit Rating Agencies at Humboldt University, the American Finance Association annual meetings in Denver (2011); and seminar participants at the University of Amsterdam, Rotterdam School of Management, and the Dutch National Bank for helpful comments and information. We especially thank Campbell Harvey (the Editor), an anonymous associate editor, and an anonymous referee for many helpful comments and advice

Corporate governance and firm operating performance

Corporate governance, Firm operating performance, U.S. stock exchanges, D21, G34, M41, M42,

Corporate Governance and Performance of Externally Managed Singapore Reits

10.1007/s11146-012-9377-9Journal of Real Estate Finance and Economics464664-68