Abstract

This research analyzes the effects foreign investors have on corporate social responsibility. We analyzed the impact of foreign investors’ equity ratio on corporate social responsibility for a period of five years from 2006 to 2010. Additionally, we verified whether the foreign investor’s equity ratio had different effects on specific items of corporate social responsibility. As a result firms with a higher foreign equity ratio were found to actively participate in social contribution activities but the result was not statistically significant. Firms with high foreign investors’ equity ratio were positively correlated with corporate integrity, employee satisfaction, and economic growth contribution. However they showed negative correlations with fairness and social contribution. This shows that the firms corporate social responsibility varies according to the firms’ foreign investors’ tendency. Also the results were not significant since individual investors showed different preferences toward each corporate social responsibility items. This is the first study to analyze both the effects of institutional investors and foreign investors on corporate social responsibility. The research is significant in that it showed foreign investors have different impacts on each items of corporate social responsibility.

Keywords

• foreign investors
• corporate social responsibility
• corporate governance structure
• foreign investors’ equity ratio
• institutional investors

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