The Effect of Socially Activist Investment Policies on the Financial Markets: Evidence from the South African Boycott
Governments and vocal institutional shareholders have been exerting pressure on companies they deem to have objectionable operations (such as tobacco or chemical producers). This paper studies the effect of the most important legislative and shareholder boycott to date, the boycott of the South Africa's apartheid regime. We find that the announcement of legislative/shareholder pressure of voluntary divestment from South Africa had little discernible effect either on the valuation of banks and corporations with South African operations or on the South African financial markets. There is weak evidence that institutional shareholdings increased when corporations divested. In sum, despite the public significance of the boycott and the multitude of divesting companies, financial markets seem to have perceived the boycott to be merely a ``sideshow.''
|Date of creation:||Nov 1995|
|Date of revision:|
|Contact details of provider:|| Postal: 110 Westwood Plaza, Los Angeles, CA. 90095|
Phone: (310) 825-1953
Fax: (310) 206-5455
Web page: http://www.anderson.ucla.edu/faculty/finance
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:wop:callfi:_005. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.