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The price of sin in the Pacific-Basin

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  • Durand, Robert B.
  • Koh, SzeKee
  • Tan, Paul LiJian
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    Abstract

    Hong and Kacperczyk (2009) argue that social norms against sin stocks influence investor behavior and corporate financial policies. This paper examines “sin” stocks in seven Pacific-Basin markets that exhibit a variety of social norms: Australia, India, Japan, South Korea, Malaysia, New Zealand and Singapore. In doing so, we provide further evidence on the pricing of sin stocks. Consideration of measurable cultural differences between the markets suggests the price of sin is a manifestation of groupthink.

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    Bibliographic Info

    Article provided by Elsevier in its journal Pacific-Basin Finance Journal.

    Volume (Year): 21 (2013)
    Issue (Month): 1 ()
    Pages: 899-913

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    Handle: RePEc:eee:pacfin:v:21:y:2013:i:1:p:899-913

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    Web page: http://www.elsevier.com/locate/pacfin

    Related research

    Keywords: Asset pricing; Behavioral finance; Corporate financial policy; Socially responsible investment; Social norms; Groupthink;

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    Cited by:
    1. Leventis, Stergios & Hasan, Iftekhar & Dedoulis , Emmanouil, 2013. "The cost of sin: The effect of social norms on audit pricing," Research Discussion Papers 13/2013, Bank of Finland.
    2. Durand, Robert B. & Koh, SzeKee & Limkriangkrai, Manapon, 2013. "Saints versus Sinners. Does morality matter?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 24(C), pages 166-183.
    3. Fauver, Larry & McDonald, Michael B., 2014. "International variation in sin stocks and its effects on equity valuation," Journal of Corporate Finance, Elsevier, vol. 25(C), pages 173-187.

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