Saints versus Sinners. Does morality matter?
AbstractSocial norms constrain investors from investing in “sin stocks”, affecting the returns and corporate financial policies of such firms (Hong and Kacperczyk, 2009). This paper finds that “Saints” are influenced by social norms. In almost all instances, where an effect on “Sinners” is positive (negative), we find that the effect for ‘Saints’ is negative (positive). Hong and Kacperczyk provide evidence that social norms prevent ‘evil’ outcomes. This paper finds that social norms exert positive pressure on both investors and firms in the US equity market.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.
Volume (Year): 24 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/intfin
Asset pricing; Portfolio choice; Socially responsible investing; MSCI KLD400 Social Index;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
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