Publication Type

Journal Article

Version

acceptedVersion

Publication Date

6-2022

Abstract

We examine whether and when socially oriented shareholder activists use firms’ corporate social performance (CSP) to identify them as attractive targets for their activism. We build on the research in social movements theory and stakeholder theory to theorize how firms’ engagement with primary and secondary stakeholders reflected in their technical and institutional CSP respectively allows socially oriented shareholder activists to identify targets. We develop a theoretical model by identifying corporate targets’ degree of (1) receptivity to and (2) need to comply with activist demands as two key dimensions of their corporate opportunity structure that explains the variance in firms’ attractiveness as targets for activist demands. We show that a firm’s technical and institutional CSP independently affect the likelihood of activists targeting the firm. We also show that our model has greater explanatory power at firms with high resource slack and from activists not identifying as socially responsible investment funds. Analysis of CSP and shareholder proposals data of 992 U.S. public firms over an 8-year window of observation largely supports our theory.

Keywords

Corporate opportunity structure, Corporate social performance, Shareholder activism, Stakeholder theory

Discipline

Business Law, Public Responsibility, and Ethics | Organizational Behavior and Theory | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Journal of Business Ethics

Volume

178

Issue

2

First Page

307

Last Page

323

ISSN

01674544

Identifier

10.1007/s10551-021-04785-5

Publisher

Springer

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1007/s10551-021-04785-5

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