Is Venture Capital Socially Responsible? The Effect of VC Funding on Companies

This study explores how corporate social responsibility (CSR) initiatives are guided by prior relationships with venture capital (VC) firms. We argue that VC-backed companies are less likely to adopt CSR practices due to the imprinting of short termism but time and VC investment characteristics moderate this relationship. We find that VC-backed companies have poorer CSR records and that their average CSR records improve in time but this improvement is significantly less for VC-backed (versus non-VC-backed) companies. However, when VC-backed companies receive funding from younger firms that specialize in socially responsible investing or from university-based VC funds, their CSR records improve.

Please contact Sinan Goktan, sinan.goktan@csueastbay.edu if you have any questions about his presentation.

Presentation recorded on February 14, 2019 at California State University East Bay.

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