Do Stable Institutional Investors Influence Employee Safety?

Abstract

Using establishment-level data compiling incidents of work-related injuries from the Occupational Safety and Health Administration (OSHA), we find that workplace injury and illness rates decrease with institutional ownership stability. Our further analyses show that firms with more stable institutional ownership are likely to initiate socially responsible investing proposals and have lower employee workloads/pressure. These results suggest two potential mechanisms through which stable institutional investors influence workplace safety. Overall, stable institutional investors seem to benefit from improvements in employee safety, as work-related injuries have a negative impact on firm value.