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The price of sin in the Pacific-Basin

Author Info

Listed author(s):
  • Durand, Robert B.
  • Koh, SzeKee
  • Tan, Paul LiJian
Registered author(s):

    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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    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X12000492
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    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
    DOI: 10.1016/j.pacfin.2012.06.005
    Contact details of provider: Web page: http://www.elsevier.com/locate/pacfin

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

    Find related papers by JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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    Cited by:

    1. Borgers, A.C.T., 2014. "Responsible investing : New insights into performance and tastes," Other publications TiSEM 587e777f-c242-4a44-968e-7, Tilburg University, School of Economics and Management.
    2. Leventis, Stergios & Hasan, Iftekhar & Dedoulis, Emmanouil, 2013. "The cost of sin: The effect of social norms on audit pricing," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 152-165.
    3. Koh, SzeKee & Durand, Robert B. & Limkriangkrai, Manapon, 2015. "The value of Saints and the price of Sin," Pacific-Basin Finance Journal, Elsevier, vol. 35(PA), pages 56-72.
    4. Pieter Jan Trinks & Bert Scholtens, 2017. "The Opportunity Cost of Negative Screening in Socially Responsible Investing," Journal of Business Ethics, Springer, vol. 140(2), pages 193-208, January.
    5. 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.
    6. 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.

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