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How does the Market Price of the Corporate Sponsor React to Socially Responsible Fund Introductions?

Author

Listed:
  • Jonathan Peillex

    (CRIISEA, University of Picardie Jules Vernes)

  • Loredana Ureche-Rangau

    (CRIISEA, University of Picardie Jules Vernes)

Abstract

This paper studies the impact of a Socially Responsible (SR) fund launch on the market price of the corporate sponsor promoting the fund. Our evidence suggests that while overall the introduction of a SR fund does not increase, on the short run, the market value of the corporate sponsor, the market reaction to such announcements evolved through time from very skeptical in the early stages of the SR funds industry to positive over the most recent years. Moreover, SR funds launching during periods of market stress is more rewarding than the same strategy under normal market conditions, while the introduction of multiple funds simultaneously also leads to a short run increase of the market value of the corporate sponsor.

Suggested Citation

  • Jonathan Peillex & Loredana Ureche-Rangau, 2014. "How does the Market Price of the Corporate Sponsor React to Socially Responsible Fund Introductions?," Bankers, Markets & Investors, ESKA Publishing, issue 131, pages 17-29, July-Augu.
    • Handle: RePEc:rbq:journl:i:131:p:17-29
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    Citations

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    Cited by:

    1. Vincent Lavaine, 2020. "Intérêts et Limites de la labélisation du marché français de l'ISR," Working Papers hal-02494009, HAL.
    2. Peillex, Jonathan, 2022. "Comment expliquer la décision de création d’un fond éthique ? [What explain the creation of ethical funds?]," MPRA Paper 115067, University Library of Munich, Germany.
    3. Peillex, Jonathan, 2023. "Réaction des investisseurs à la création de fonds éthiques [Investor reaction to the creation of ethical funds]," MPRA Paper 118930, University Library of Munich, Germany.
    4. Alexandra Huang, 2019. "Déterminants des encours nationaux socialement responsables : Une analyse exploratoire internationale," Working Papers hal-02242796, HAL.
    5. Barda, Kelly, 2020. "Analyser la performance financière des indices boursiers environnementaux [Analyzing financial performance of green stock market indices]," MPRA Paper 102537, University Library of Munich, Germany.
    6. Mendiela, Pauline, 2021. "Information security breaches and financial market reaction: the French case," MPRA Paper 105029, University Library of Munich, Germany.
    7. mehagni, soheir, 2019. "Comités de savants islamiques [Islamic boards]," MPRA Paper 92863, University Library of Munich, Germany.
    8. Peillex, Jonathan & El Ouadghiri, Imane & Gomes, Mathieu & Jaballah, Jamil, 2021. "Extreme heat and stock market activity," Ecological Economics, Elsevier, vol. 179(C).

    More about this item

    Keywords

    Corporate Sponsor; Ethical Finance; Event Study; SR Funds;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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