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Is corporate social responsibility sufficient enough to explain the investment by socially responsible funds?
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Tosun, Onur (2017) Is corporate social responsibility sufficient enough to explain the investment by socially responsible funds? Review of Quantitative Finance and Accounting, 49 (3). pp. 697-726. doi:10.1007/s11156-016-0605-x ISSN 0924-865X.
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Official URL: http://dx.doi.org/10.1007/s11156-016-0605-x
Abstract
I propose an explanation for investment decisions by Socially Responsible Investment funds (SRI) on the firms with higher Corporate Social Responsibility (CSR). Different from the previous literature, I use a unique and comprehensive measure that considers both firm CSR ratings and fund CSR perception. I show SRI mutual funds increase their ownership about 15% for one unit increase in the firm CSR score when those funds are highly sensitive to CSR. This finding is more pronounced for Employee Relations and Society areas of CSR. The results also hold for a broader range of mutual funds. While industry concentration does not have influence on the fund investment, SRI funds particularly choose socially responsible firms operating in construction, transportation, personal services, and financial sector. I show the funds with CSR sensitivity underperform the market in general and fail to improve their portfolio performance after they invest in the firms with high CSR.
Item Type: | Journal Article | ||||||||
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Alternative Title: | |||||||||
Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Mutual funds, Social responsibility of business | ||||||||
Journal or Publication Title: | Review of Quantitative Finance and Accounting | ||||||||
Publisher: | Springer New York LLC | ||||||||
ISSN: | 0924-865X | ||||||||
Official Date: | October 2017 | ||||||||
Dates: |
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Volume: | 49 | ||||||||
Number: | 3 | ||||||||
Page Range: | pp. 697-726 | ||||||||
DOI: | 10.1007/s11156-016-0605-x | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 21 September 2016 | ||||||||
Date of first compliant Open Access: | 22 May 2017 | ||||||||
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