CSR, rationality and the ethical preferences of investors in a laboratory experiment
AbstractThis experimental study aims to clarify to what extent and in which direction investors react to CSR (Corporate Social Responsibility) initiatives meant to upgrade the ethical standards of firms beyond the minimal requirements of law. Subjects in the laboratory were invited to invest their endowment in a portfolio of financial assets. We provided information on the expected returns of each stock and on its inclusion in an ethical index, or exclusion from it. Our findings show that subjects’ behavior appears to be a function not only of their individual pay-offs but also of the information on the ethical standards of the firms issuing stocks. Most of them, however, did not show a fully irrational behavior as they consistently correlated the share of stocks with their expected returns. We may conclude that the sizeable reaction of our sample’s investors to the inclusion of a stock in the ethical index, or its exclusion from it, is the fruit of a deliberate choice.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economic Policy, Finance and Development (DEPFID), University of Siena in its series Department of Economic Policy, Finance and Development (DEPFID) University of Siena with number 0609.
Date of creation: Aug 2009
Date of revision:
ethical stock indexes; Corporate Social Responsibility; investors; experiment.;
Other versions of this item:
- Consolandi, Costanza & Innocenti, Alessandro & Vercelli, Alessandro, 2009. "CSR, rationality and the ethical preferences of investors in a laboratory experiment," Research in Economics, Elsevier, vol. 63(4), pages 242-252, December.
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-21 (All new papers)
- NEP-CBE-2009-11-21 (Cognitive & Behavioural Economics)
- NEP-CFN-2009-11-21 (Corporate Finance)
- NEP-EXP-2009-11-21 (Experimental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Claus Holm & Pall Rikhardsson, 2008. "Experienced and Novice Investors: Does Environmental Information Influence Investment Allocation Decisions?," European Accounting Review, Taylor & Francis Journals, vol. 17(3), pages 537-557.
- Michael C. Jensen, 2010.
"Value Maximization, Stakeholder Theory, and the Corporate Objective Function,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 22(1), pages 32-42.
- Michael Jensen, 2001. "Value Maximisation, Stakeholder Theory, and the Corporate Objective Function," European Financial Management, European Financial Management Association, vol. 7(3), pages 297-317.
- Michael C. Jensen, 2001. "Value Maximization, Stakeholder Theory, And The Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(3), pages 8-21.
- Belkaoui, Ahmed, 1980. "The impact of socio-economic accounting statements on the investment decision: An empirical study," Accounting, Organizations and Society, Elsevier, vol. 5(3), pages 263-283, July.
- Costanza Consolandi & Ameeta Jaiswal-Dale & Elisa Poggiani & Alessandro Vercelli, 2008.
"Global Standards and Ethical Stock Indexes: the case of the Dow Jones Sustainability Stoxx Index,"
Department of Economic Policy, Finance and Development (DEPFID) University of Siena
0208, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
- Costanza Consolandi & Ameeta Jaiswal-Dale & Elisa Poggiani & Alessandro Vercelli, 2009. "Global Standards and Ethical Stock Indexes: The Case of the Dow Jones Sustainability Stoxx Index," Journal of Business Ethics, Springer, vol. 87(1), pages 185-197, April.
- repec:ner:maastr:urn:nbn:nl:ui:27-19331 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carlo Zappia).
If references are entirely missing, you can add them using this form.