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What determines the inclusion in a sustainability stock index?: A panel data analysis for european firms

  • Ziegler, Andreas
  • Schröder, Michael

This paper empirically examines the determinants of the inclusion of European firms in the Dow Jones Sustainability World Index and the Dow Jones Stoxx Sustainability Index. While a restricted econometric analysis implies a positive effect of corporate financial performance, this impact becomes ambiguous in more flexible panel probit models. Our estimation results therefore strengthen the importance of the use of panel data and the incorporation of unobserved heterogeneity. Furthermore, our analysis shows that the sustainability assessment and selection process for the composition of the Dow Jones sustainability indexes and thus factors that need not necessarily be directly connected to corporate environmental or social activities also have an influence.

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Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 4 (February)
Pages: 848-856

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:4:p:848-856
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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