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Does Sustainability Investment Provide Adaptive Resilience to Ethical Investors? Evidence from Spain

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  • Eduardo Ortas

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  • José Moneva
  • Roger Burritt
  • Joanne Tingey-Holyoak

Abstract

Although sustainable and responsible investment (SRI) has quite recently become a hot research topic, scarcely any systematic research has been paid to the performance of this non-conventional approach to investment during the financial crisis that emerged in mid-2008 when the resilience of the financial markets was sorely tested. Such real-world resilience in practice is the subject of the current research which tests whether environmental, social and governance screens provides ethical investors with adaptive resilience in bull and bear market conditions by focussing on the SRI equity index of one of the most active markets in Europe in terms of ethical investment, the FTSE4Good-Ibex in Spain. Multivariate Generalized Autoregressive Conditional Heteroskedasticity (M-GARCH) analysis indicates that ethical investors in the equity market examined with evidence that greater resilience in severe business cycle shocks could be attributable to SRI by companies. Although limited to a single country study, the results have implications for investors seeking resilience in crisis: when individual values and beliefs towards sustainability tie with personal investment strategy, the end result is adaptive financial resilience, social well-being and environmental defence. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Eduardo Ortas & José Moneva & Roger Burritt & Joanne Tingey-Holyoak, 2014. "Does Sustainability Investment Provide Adaptive Resilience to Ethical Investors? Evidence from Spain," Journal of Business Ethics, Springer, vol. 124(2), pages 297-309, October.
  • Handle: RePEc:kap:jbuset:v:124:y:2014:i:2:p:297-309
    DOI: 10.1007/s10551-013-1873-1
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    2. repec:kap:jbuset:v:150:y:2018:i:1:d:10.1007_s10551-016-3189-4 is not listed on IDEAS
    3. repec:gam:jsusta:v:11:y:2019:i:6:p:1561-:d:213965 is not listed on IDEAS
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    5. María del Mar Miralles-Quirós & José Luis Miralles-Quirós, 2017. "Improving Diversification Opportunities for Socially Responsible Investors," Journal of Business Ethics, Springer, vol. 140(2), pages 339-351, January.
    6. Ahmed Musbah & Christopher J. Cowton & David Tyfa, 2016. "The Role of Individual Variables, Organizational Variables and Moral Intensity Dimensions in Libyan Management Accountants’ Ethical Decision Making," Journal of Business Ethics, Springer, vol. 134(3), pages 335-358, March.

    More about this item

    Keywords

    Sustainable and responsible investment; Adaptive resilience; Environmental; social and governance screens; Risk management; FTSE4Good indexes; G32; G11; M14;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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