Socially Responsible Investment and Firm Value: The Role of Institutions

Abstract We explore the impact of Socially Responsible Investment (SRI) on firm value by examining the role of institutions, an important factor neglected in many studies. Using data for 13,718 listed companies in 17 countries from 2005 to 2018, and employing a quantile regression model, we show both formal and informal institutions to have a significant impact on firm value. Through negative screening associated with SRI, institutions may reduce firm value for excluded enterprises.