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

• In Event: Behavioral Accounting

Abstract

This study investigates investors’ perceptions of benefit corporations and how this newly established corporate form impacts their investment decisions. We utilize an experimental setting to examine how benefit corporation status impacts investors’ choice between a mutual fund consisting of benefit corporations and a mutual fund consisting of traditional C corporations. In addition, we investigate whether the financial performance of mutual funds, in conjunction with benefit corporation status, influences investors’ decision. Our results indicate that investors view benefit corporation status as providing incremental information about the firm’s future corporate social responsibility performance. Additionally, we find that investors prefer to invest in benefit corporations when they have similar financial performance to traditional C corporations, while they appear to not have a preference between the two corporate forms when traditional C corporations have superior financial returns.

Authors

• Lauren A. Cooper, West Virginia University

• Jill Weber, University of WI-Whitewater