Do institutional investors promote sustainability in family business? Evidence from Italian listed firms

The aim of this study is to investigate the role of institutional investors in promoting sustainability in family firms, measured in terms of corporate sustainability performance (CSP) and sustainability disclosure. Due to societal pressure, firms have started to engage more in pursuing sustainable practices and embracing sustainability tenets, and from a governance perspective, they have begun to make changes and adapt their governance structures. The demand for sustainable corporate governance and CSR-oriented initiatives is particularly relevant for family firms, considered to be more long-term oriented. This study contributes to the ongoing debate about the antecedents of corporate sustainability outcomes, shedding some light on the role of institutional investors’ ownership by analyzing as a sample all the Italian non-financial family firms listed on the Italian Milan Stock Exchange between 2011 and 2021. Understanding how the presence of institutional investors contributes to fostering sustainability in family businesses can be beneficial to both the firms and the society.