Does Benefit Corporation Status Matter to Investors? An Exploratory Study of Investor Perceptions and Decisions

2020/01/06 by Lauren A. Cooper, Lauren Cooper, Jill Weber · 49 citations
Business, Management and Accounting · Decision Sciences · Psychology · #Accounting #Actuarial science #Behavioral economics #Business #Corporate Social Responsibility Reporting #Corporate social responsibility #Corporation #Environmental Sustainability in Business #Ethics in Business and Education #Exploratory research #Finance #Investment (military) #Investment decisions #Perception #Political science #Politics #Psychology #Public relations #Sample (material) #Value (mathematics)

paper · doi:10.1177/0007650319898462

published in Business & Society 60(4), 979-1008 (SAGE Publishing)

openalex publication_date 2020/01/06 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23

Abstract

We investigate whether the disclosure of a firm’s decision to organize as a benefit corporation (BC) rather than a traditional C corporation (CC) influences investors. We survey 136 investors and 57 MBA students and find that they expect BCs to attain higher future corporate social responsibility (CSR) than CCs even when both have equal CSR ratings. Approximately one third of our sample prefers to invest in BCs when CCs have greater financial returns, indicating a willingness by some investors to sacrifice personal financial gain for social good. Our results suggest that investors weight the information contained in BC disclosures as reliable and value-relevant in their investment decisions. We extend the CSR disclosure literature by indicating how investors weight this new type of CSR information, which may affect how BCs fare as publicly traded companies.

Citations

• Common method biases in behavioral research: A critical review of the literature and recommended remedies.

Cited by

• The Consequences of Financial Leverage: Certified B Corporations' Advantages Compared to Common Commercial Firms. [europepmc]
• Boosting circular economy via the b-corporation roads. The effect of the entrepreneurial culture and exogenous factors on sustainability performance [europepmc]

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