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Does military leadership regulate sin investments? Evidence from property/casualty insurance industry

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  • Cai, Chen
  • Wang, Jinjing

Abstract

With a novel dataset of property/casualty (P/C) insurance companies’ sin investments- holdings of bonds and stocks issued by companies involved in producing alcohol, tobacco, and gaming, we find that the presence of military leadership strengthens insurance companies’ adherence to social norms and discourages portfolio allocation to sin investments, especially sin bonds. The reduction effect is more pronounced during the recent financial crisis when insurance companies are enticed to sacrifice social norms for financial gains. Our findings offer valuable insights into socially responsible investing by institutional investors.

Suggested Citation

  • Cai, Chen & Wang, Jinjing, 2023. "Does military leadership regulate sin investments? Evidence from property/casualty insurance industry," Finance Research Letters, Elsevier, vol. 58(PC).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pc:s1544612323008668
    DOI: 10.1016/j.frl.2023.104494
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    More about this item

    Keywords

    Military; Leadership; Sin investments; Socially responsibility investing;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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