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Financial Performance of Socially Responsible Indices

Author

Listed:
  • Śliwiński Paweł

    (Department of International Finance, Poznań University of Economics and Business, Poland)

  • Łobza Maciej

    (Department of International Finance, Poznań University of Economics and Business, Poland)

Abstract

This article analyzes rate-of-return and risk related to investments in socially responsible and conventional country indices. The socially responsible indices are the DJSI Korea, DJSI US and Respect Index, and the corresponding conventional country indices are the Korea Stock Exchange Composite KOSPI, Dow Jones Industrial Average and WIG20TR. We conclude that investing in the analyzed SRI indices do not yield systematically better results than investing in the respective conventional indices, both in terms of neoclassical risk and return rate.This finding suggest that socially responsible investing should be assessed in terms of behavioral economics related to the psycho-social features of investors, rather than to simplified rational choices (based only on the risk and return rate analysis) that neoclassical economics assumes.

Suggested Citation

  • Śliwiński Paweł & Łobza Maciej, 2017. "Financial Performance of Socially Responsible Indices," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(1), pages 25-46, March.
    • Handle: RePEc:vrs:ijomae:v:53:y:2017:i:1:p:25-46:n:3
    DOI: 10.1515/ijme-2017-0003
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    References listed on IDEAS

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    4. Sabastian Utz & Maximillian Wimmer, 2014. "Are they any good at all? A financial and ethical analysis of socially responsible mutual funds," Journal of Asset Management, Palgrave Macmillan, vol. 15(1), pages 72-82, February.
    5. Bogna Janik & Marcin Bartkowiak, 2015. "The comparison of socially responsible indices in Central and Eastern Europe," International Journal of Environmental Technology and Management, Inderscience Enterprises Ltd, vol. 18(2), pages 153-169.
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    Cited by:

    1. Brzeszczyński, Janusz & Gajdka, Jerzy & Schabek, Tomasz, 2021. "How risky are the socially responsible investment (SRI) stocks? Evidence from the Central and Eastern European (CEE) companies," Finance Research Letters, Elsevier, vol. 42(C).

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    More about this item

    Keywords

    socially responsible investments (SRI); socially responsible indices; investment performance;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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