Foundation Ownership and Sustainability

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Concerns about the sustainability of contemporary capitalism have inspired a search for organizational forms that are more concerned with solving environmental and social problems and less focused on short-term shareholder value maximization. We examine whether one such model – foundation ownership of business companies – is associated with better sustainability outcomes. We suggest modelling foundation-owned companies as institutional hybrids that combine the characteristics of (charitable) foundations and (for-profit) business companies. We propose that foundation-owned companies are influenced by the philanthropic logic that characterizes foundations and therefore are more inclined to environmental and social considerations than business companies characterized by a for-profit mindset. Using hand-collected data on listed foundation-owned companies during 2003-2020, we find support for this hypothesis. Foundation-owned firms tend to receive higher environmental, social, and governance (ESG) ratings, specifically along both the environmental and social dimensions. The results hold across alternative ESG ratings, quantitative output measures, difference-in-differences testing and instrumental variable estimations.
Original languageEnglish
Title of host publicationProceedings of the Eighty-third Annual Meeting of the Academy of Management
EditorsSonia Taneja
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2023
Publication statusPublished - 2023
EventThe Academy of Management Annual Meeting 2023: Putting the Worker Front and Center - Boston, United States
Duration: 4 Aug 20238 Aug 2023
Conference number: 83


ConferenceThe Academy of Management Annual Meeting 2023
Country/TerritoryUnited States
Internet address
SeriesAcademy of Management Annual Meeting Proceedings

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