Do local social norms affect investors' involvement in social activism? Revisiting the case of US institutional investors

Prior evidence suggests that, in contrast to European investors, local norms related to environmental and social (E&S) beliefs do not affect the willingness of US institutional investors to push for E&S improvements in US firms. We revisit this issue except, instead of measuring E&S social norms at the country level, we allow E&S social norms to vary between states. We find that the shareholdings of non-local US institutional investors from states with strong E&S social norms are positively related to E&S-related shareholder activism, indicating that local E&S social norms do matter for US institutional investors.