Targeted poverty alleviation, over-indebted firms and institutional investors

Purpose Drawing on social norms, this study examines how targeted poverty alleviation (TPA) influences institutional investors’ shareholdings. It investigates how shareholding decisions are affected when firms engage in normative behaviors, such as TPA, and non-normative behaviors, such as over-indebtedness. Moreover, it assesses the moderating role of media coverage in these dynamics. Design/methodology/approach This study uses data from the China Stock Market and Accounting Research Database on A-share listed companies in Shanghai and Shenzhen from 2016 to 2022. It conducts a fixed-effect panel regression analysis and endogeneity and robustness tests. Findings According to social norms, TPA increases institutional shareholdings. However, over-indebtedness weakens the positive effect of TPA on institutional investors’ shareholdings. Media coverage exacerbates the negative effect of over-indebtedness, resulting in a pronounced decline in institutional investment. Originality/value This study extends the application of social norms to TPA and over-indebtedness, revealing how social norm conflicts and media coverage shape institutional investment. Policymakers and investors should integrate social norms into governance frameworks. Although firms experience a positive effect from fulfilling philanthropic responsibilities, they should prioritize survival when facing financial distress. As Edmans stated, we want great companies, not just companies that are great at CSR.