ethical investment processes and outcomes there is a growing body of literature on ethical or socially responsible investment across a range of disciplines this paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners one of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour noting that ethical investment is seldom characterised by agreement about what it actully constitutes and that much of the extant research focuses on a narrow set of issues the paper argues that there are benefits associated with examining ethical investment as a process

social investing mainstream or backwater social investing though not yet fully mainstream has the potential to obtain such status questions relating to the future of social investing include the following 1 what properly falls within the ambit of social investing assuming that no single definition of social responsibility is feasible what then are the limits 2 what do we need to know about investor psychology concerning social investing what motivates people to buy socially screened investments and why do they sometimes act inconsistently 3 how can we improve the measures of social performance is it possible to develop gaap and gaas equivalents for social reporting 4 should social reports by firms be audited if so how 5 what sorts of public policies are necessary to support the social screening of investments

putting sustainable investing into practice a governance framework for pension funds this article presents a framework intended to provide pension funds with practical guidance for the successful implementation of a sustainable investing strategy the framework is developed with respect to the uk and us pension funds as these share certain common legal characteristics and focuses on the changes that pension funds adopting such a strategy should make to their investment strategies and governance particularly through the formulation and articulation of clear investment mission and strong investment beliefs the article proceeds with a review of socially responsible investment sri and more recent responsible investment ri literature in the context of growing public awareness but not necessarily understanding of the concept of sustainability literature review of sri field sri ri and sustainable investing section it then examines the literature on pension fund governance arguing the need for more detailed practical guidance for funds moving towards sustainable investing especially for those implementing a sustainable investing strategy anglo american pension fund governance section it presents the framework for the practical implementation of sustainable investing in the sustainable investing framework section finally we review the relevant anglo american legal backdrop outlining how pension funds adopting our framework should approach their fiduciary obligations and then discussing potential regulatory enablers of sustainable investment legal context barriers to and enablers of sustainable investing section

what will consumers pay for social product features the importance of ethical consumerism to many companies worldwide has increased dramatically in recent years ethical consumerism encompasses the importance of non traditional and social components of a company s products and business process to strategic success such as environmental protectionism child labor practices and so on the present paper utilizes a random utility theoretic experimental design to provide estimates of the relative value selected consumers place on the social features of products

a four nation study of thee relationship between marketing effectiveness corporate culture corporate values and market orientation the aim of this study was to establish the ways in which senior executives in four countries which shared a common language united kingdom united states australia and new zealand characterized both their firm s marketing effectiveness and corporate culture and beliefs results give support to those theorists who advance cultural specificity as the primary moderator of top managerial attitudes but also emphasise that the best predictor of marketing effectiveness is similar in all four nations the primacy of the importance of people and with quality

the effects of prior beliefs and learning on consumers acceptance of genetically modified foods abstract new food products using genetically modified crops appeared in u s supermarkets starting in 1996 and consumers perceived some risks this paper examines the role of consumers prior beliefs about genetic modification and of diverse new information on their willingness to pay for foods that might be genetically modified we use data from economics experiments and show that participants who had informed prior beliefs discounted gm labeled food products more highly than those who had uninformed prior beliefs uninformed participants were especially susceptible to information from interested and third parties in contrast informed participants were generally not affected significantly by new information

csr in stakeholde expectations and their implication for company strategy recent years have seen dramatic changes in the attitudes and expectations brought to bear on companies over ten years of research at mori has shown the increasing prominence of corporate responsibility for a wide range of stakeholders from consumers and employees to legislators and investors

imperfect markets business ethics as an easy virtue this paper marks a radical diversion from the large body of prevailing literature in business ethics which primarily views the issue in individual personal terms i e corporate executive and employee and suggests that making corporations more ethical would primarily come through changes in executive behavior while this approach has strong intellectual roots in moral philosophy and religion it fails in explaining the persistence of unethical and illegal behavior among corporations of all sizes financial health competitive market conditions and level of individual executive compensation this paper argues for a fundamentally different approach to understanding ethical behavior or lack thereof among corporations and their executives it is asserted that an overwhelmingly large rationale and or inducement for proactive ethical business behavior is rooted in competitive aspects of particular markets and industry structures prevailing in those markets furthermore while highly competitive markets may promote efficiency they do not guarantee ethical behavior and may indeed provide greater opportunities and incentives for unethical business behavior thus by following the current prognosis we could be wasting enormous resources in terms of teaching business ethics and creating and imposing corporate codes of conduct we assert that these approaches would at best make a marginal improvement in the ethical performance of corporations while at the same time exacerbate the problem by ignoring more fundamental structural issues imperfect markets with their above market profits are a necessary but insufficient condition for corporations to behave ethically it is only under conditions of imperfect markets that individual executives can play an important role in guiding their corporations toward greater ethical norms these are undertaken for a variety of reasons including protecting a corporation s good name public expectations competitive norms and corporate culture and individual executive s predilections to name a few

measuring investors socially responsible preferences in mutual funds the aim of this study is to analyze investor behavior towards socially responsible mutual funds the analysis is based on an experimental study where a sample of individuals takes investment decisions under different parameters of information about the investment alternatives and expected returns in the experiment each participant decides how to distribute an investment budget between two funds returns on which are uncertain and change over time two treatments are conducted each providing a different degree of information on the socially responsible sr character of one of the two investment alternatives the results obtained suggest that although individuals criteria for investment are essentially guided by returns and diversification participants invest significantly more in a fund when they are explicitly informed about its sr nature in particular participants who declare being concerned about sr actually invest significantly more in the sr alternative furthermore the level of sr faithfulness among a small group of investors is such that they invest the main share of their budget in the sr fund even when the return differential is highly unfavorable providing clear information about the sr characteristics of an investment is crucial to help investors express their preferences

the drivers of responsible investment the case of european pension funds we investigate what drives responsible investment of european pension funds pension funds are institutional investors who assure the income of part of the population for a long period of time increasingly stakeholders hold pension funds accountable for the non financial consequences of their investments and many funds have engaged in responsible investing however it appears that there is a wide difference between pension funds in this respect we investigate what determines pension funds responsible investments on the basis of a survey of more than 250 pension funds in 15 european countries in 2010 we use multinomial logistic regression and find that especially legal origin of the country ownership of the pension fund and fund size related variables are to be associated with pension funds responsible investment for fund size we establish a curvilinear relationship especially the smallest and largest pension funds in the sample tend to engage with responsible investing

micro equity for sustainable development selection monitoring and exit strategies of micro angels abstract sustainable development requires balancing environmental social and financial concerns this requires investors to select and monitor entrepreneurs who would balance these triple concerns at the same time there has been considerable attention to small is beautiful and micro investors have stepped in to look for such eco entrepreneurs to the classical institutional logic of economic returns they add the logic of social returns as well as the logic of environmental and local safeguards this study looks at investment clubs in france which have been coping with this balance of people planet and profitability for the last three decades we study their preferences in the selection process for investment projects in the entrepreneurs monitoring process as well as their exit strategies using principal components analysis we find that a large number of selection criteria can be regrouped into underlying factors that take into account two out of the three major dimensions of sustainable development at a time we find that four factors lie beneath the criteria used by the micro angels in the monitoring process we have also been able to establish a one to one correspondence between four of the six major exit strategies and four selection factors suggesting a prior relationship between selection process criteria and preferred exit strategies

customer led and market oriented let s not confuse the two christensen and bower 1996 report the results of a study of how customer power contributes to the failure of leading firms during a period of industry discontinuity they conclude that developing a customer orientation appears not to be wise advice under these conditions however this conclusion is contradicted by long standing theory and recent research in marketing in this commentary we distinguish between two forms of customer orientation that are frequently confused the first a customer led philosophy is primarily concerned with satisfying customers expressed needs and is typically short term in focus and reactive in nature the second a market oriented philosophy goes beyond satisfying expressed needs to understanding and satisfying customers latent needs and thus is longer term in focus and proactive in nature based on theory and substantial evidence the advice to become market oriented appears sound regardless of the market conditions a business faces 1998 john wiley sons ltd

responsible investing of pension assets links between framing and practices for evaluation despite the increase in the acceptance of responsible investing ri in general allianz in www allianzglobalinvestors com 2010 the global community is still witnessing unprecedented levels of practices that can only be categorized as unsustainable it appears then that either the inroads made by the ri community have not kept up with the increase in unsustainable practices or that the ri process itself has been ineffective at producing meaningful change the current study aims to investigate the practices used by pension plan sponsors to determine how they may enable or interfere with the adoption of implementation of ri we adopt framing theory benford and snow annual review of sociology 26 611 639 2000 specifically the idea that particular frames find alignment when they resonate with their targets by either bridging extending amplifying or transforming a domain we extend research to include understudied practices by performing an analysis of 60 public pension funds in canada we find evidence of disconnect between the financial frame which dominates practices for compliance and evaluation and the social frame of ri as a source of change if the aim of ri is to produce long term change then a consideration of whether it aligns with extant practices is critical we discover a variety of frame alignment tactics already employed in practice we also find that even within the dominant financial frame opportunities for frame extension amplification and transformation do exist and examine how these are more or less possible depending on how the asset management structure is designed

a measure of export market orientation scale development and cross cultural validation this study reports on the construction and psychometric assessment of a measure of export market orientation four multi item scales were developed showing strong evidence of reliability and convergent discriminant and nomological validity in samples of u k and dutch exporters further analysis revealed full invariance of the final measure across the two country samples several suggestions for applying the measure in substantive research are offered

organizational changes in emerging economies drivers and consequences organizational change in emerging economies although difficult is inevitable the authors study the drivers and consequences of organizational changes in an emerging economy china the results of a firm level survey show that organizational changes in technical vs administrative areas are differentially driven by firms motivation to change past performance opportunity to change firm location and market orientation and capability to change firm ownership managers change attitude and leader charisma furthermore technical and administrative changes affect firm performance through distinct paths technical changes have a direct positive impact on performance whereas administrative changes enhance firm performance indirectly through technical changes and the effect of administrative changes on performance is strengthened by the presence of a participative culture

exploring factors that influence social retail investors decisions evidence from desjardins fund most studies on the choices motivations and behavior of investors consist of segmentations focused on socio demographic characteristics such as age income education level etc such approaches seem to simplify even mutilate reality by aggregating data about observable variables and considering investors as homogeneous groups these perspectives are inspired by a scientific approach that consists of separating in order to better understand the observed phenomena by considering individual as a homo economicus that is to say a rational and autonomous individual who makes decisions motivated by material gains these studies fail to recognize all the complexity that shapes human behavior this paper argues that to understand the behavior and choices of investors in regards to socially responsible investing sri we must consider social investors as complex individuals in addition we should take into account influence that the institution may exercise throughout the role of advisors and sri promotion strategies our research builds on a multidimensional approach that explores to what extent demographic environmental social and governance esg issues the trade offs between financial return and social values the attitudes and the role of the institution throughout the role of the advisor and sri promotion strategies influence the decisions of individual social investors moreover it adopts a more open approach by exploring the characteristics and behaviors of individual social investors in relation to those of conventional investors our research provides evidence from the desjardins fund qualitative and quantitative data gathered by desjardins from online surveys are subjected to bivariate and multivariate analyses and are complimented by ten semi structured interviews with managers analysts and advisors who provided further insight into sri investment behavior and choice the results show that while demographic characteristics still remain important in understanding the behavior and attitudes of social investors it is their social values esg issues financial return considerations and the role played by the institution in mediating investment decisions that are significantly associated with sri portfolios our research highlights the complexity surrounding the phenomenon of sri and has several implications both in terms of theory and practice

how can a ratings based method for assessing corporate social responsibility csr provide an incentive to firms excluded from socially responsible investment indices to invest in csr socially responsible investment sri indices play a major role in the stock markets a connection between doing good and doing well in business is implied leading indices such as the domini social index and others exemplify the movement toward investing in socially responsible corporations however the question remains does the ratings based methodology for assessing corporate social responsibility csr provide an incentive to firms excluded from sri indices to invest in csr not in its current format the ratings based methodology employed by sri indices in their selection processes excludes many corporations by creating limited membership lists this received ratings based structure is yet to offer an incentive for most of the excluded corporations to invest in improving their levels of csr we therefore ask under what circumstances a ratings based method for assessing csr could provide an incentive to firms excluded from sri indices to invest in csr in this article we attempt to offer a theoretical reply to this question we show that when all firms are publicly ranked according to sri index parameters such indices can indeed create a market incentive for increased investment by firms in improving their performance in the area of social responsibility we further show that this incentive tapers off as the amount of investment required exceeds a certain point or if the amount of payback on that investment fails to reach a certain threshold

morals markets and sustainable investments a qualitative study of champions sustainable investment si which integrates social environmental and ethical issues has grown from a niche market of individual ethical investors to embrace institutional investors e g pension funds resulting in 764 billion in assets under management in the uk alone eurosif 2008 european sri study 2008 eurosif paris explaining this growth is complex involving shifts in personal and collective values reactions to corporate scandals scientific and media pronouncements about climate change government initiatives responses from financial markets and the influence of si innovators in the city of london the article examines the influence of human agency through interviews with 14 si champions who have variously been responsible for launching si funds and changing investment processes and organisational structures in order to enhance si interviewees were asked about their motivations and persuasive strategies the obstacles they faced and how they overcame them as well as broader implications of si for financial markets the following key categories inform the results and the discussion values conservatism antipathy and incredulity optimism and sympathy from insiders the social and political context the business case organisational constraints inappropriate forms of remuneration short termism the nature of capitalism three discourses were also identified the first is the necessity to make a business case for si the second is the benefits that si can bring to the quest of overcoming short termism the third is a belief that for si to have a significant influence greater government intervention is required

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

the effects of customer and competitor orientations on performance in global markets a contingency analysis should companies adjust their orientations toward customers or toward competitors in global markets to answer this question we use contingency theory and examine how the effects of customer and competitor orientations on performance are moderated by different environmental conditions our results from the global hotel industry indicate that a customer orientation works better in economically developed markets as well as in markets with good local business conditions greater resource availability and demanding customers in contrast a competitor orientation is more effective in markets that are economically developing have poor local business conditions and face resource scarcity

health information and diet choices results from a cheese experiment abstract this study reports results from a choice experiment on semi hard cheese from norway about half of the 408 participants were exposed to diet related health information before performing either a choice or a ranking task while a control group did not receive such information the effects of health information on marginal willingness to pay for low saturated fat low fat and organic cheese are analyzed using rank ordered mixed logit models cheese preferences are clearly affected by exposure to health information on average the health information group is willing to pay a price premium of 27 2 nok 24 5 per kg for low saturated fat cheese and 14 4 nok 13 0 per kg for low fat cheese this is respectively 1 73 and 2 89 times more than corresponding price premiums in the control group non college medium high income age 50 70 and female participants are more clearly affected by health information than college low income age 30 49 and male participants subjective statements on diet health knowledge and awareness are used to discuss these findings our results suggest that provision of health information is likely to reduce educational differences in diet health knowledge and thus dietary behavior low income participants seem to be constrained by high food prices but not by lack of knowledge or awareness finally due to lack of diet health awareness reaching out to young people and particularly males through health information policies seems difficult

socially responsible investing a critical appraisal this paper makes three important points regarding socially responsible investing first the current methodology involving sri fund divestiture of the securities of firms that engage in socially irresponsible activity often results in unacceptable unintended consequences second in many cases the proper methodolgy for sri funds may be purposely to include the securities of such firms in the portfolio in an effort to internalize socially irresponsible interfirm spillovers finally that sri fund managers may be able to bond their performance by organizing as closed end funds subject to takeover and liquidation if the stated socially responsible objectives are not met

does firm size comfound the relationship between corporate social performance and firm financial performance there has been some theoretical and empirical debate that the positive relationship between corporate social performance csp and firm financial performance ffp is spurious and in fact caused by a third factor namely large firm size this study examines this question by integrating three meta analyses of more than two decades of research on 1 csp and ffp 2 firm size and csp and 3 firm size and ffp into one path analytic model the present study does not confirm size as a third factor which would confound the relationship between csp and ffp that is even if firm size is controlled for across studies comprising on average over 15 000 observations csp and ffp remain positively correlated showing a true score corrected path coefficient p of 0 37

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

approaching socially responsible investment with a comprehensive ratings scheme total social impact the socially responsible investment industry sri is slowly changing from a screening avoidance paradigm to a comprehensive paradigm that seeks to affect corporate behavior credible rating systems are a key component of this sea change reliable and recognizable social and environmental metrics are critical to this progress the total social impact tsi rating approach is a new social metric scheme based on a comprehensive rating of stakeholder issues this paper describes the evolution of sri ratings and the role that tsi hopes to play in affecting business behavior by promoting principled business leadership

does equity ownership matter for corporate social responsibility a literature review of theories and recent empirical findings based on the concept of shareholder primacy many scholars have argued that it is more important for businesses to earn profits for their shareholders than to provide benefits to society at large corporate social responsibility csr is often regarded as an investment that comes at the expense of shareholders in contrast research analyzing the connections between the equity ownership structure of a company and its level of csr engagement suggests that csr offers benefits to shareholders that go beyond direct financial returns from investments this study provides a comprehensive review and systematic assessment of theoretical considerations and approaches regarding different forms of equity ownership and their relationships to csr and it discusses the relevant benefits and motivations of shareholders the perceived value of these csr benefits varies among different types of shareholders as they assign unequal values to short term financial or to rather long term csr benefits based on a literature sample of 146 publications this review demonstrates central problems inherent in previous analyses given the ambiguous and partially contradictory findings of prior research this study identifies potential moderating influences that help clarify empirical evidence a contingency approach is suggested in future research as this can help resolve the problem of contradictory empirical findings and theoretical arguments

socially responsible investment and fiduciary duty putting the freshfields report into perspective a critical issue for the future growth and impact of socially responsible investment sri is whether institutional investors are legally permitted to engage in it in particular whether it is compatible with the fiduciary duties of trustees an ambitious report from the united nations environment programme s finance initiative unep fi commonly referred to as the freshfields report has recently given rise to considerable optimism on this issue among proponents of sri the present article puts the arguments of the freshfields report into some further both empirical and critical perspective however and suggests that its findings do not call for very much optimism the general argument is that while the understanding of fiduciary duty outlined by the freshfields report seems to allow institutional investors to at least sometimes take some social or environmental considerations into account the support it gives for sri is notably contingent and furthermore it rules out exactly the kind of sri which proponents of social responsibility and environmental sustainability should hold in highest regard proactive cases and socially effective investment strategies if sri is to become an important force for corporate social responsibility through its adoption by institutional investors then it is suggested that legal reform is needed

ethical screening and financial performance the case of islamic equity funds whether ethical screening affects portfolio performance is an important question that is yet to be settled in the literature this paper aims to shed further light on this question by examining the performance of a large global sample of islamic equity funds iefs from 1984 to 2010 we find that iefs underperform conventional funds by an average of 40 basis points per month consistent with the underperformance hypothesis in line with popular media claims that islamic funds are a safer investment iefs outperformed conventional funds during the recent banking crisis however we find no such outperformance for other crises or high volatility periods based on fund holdings based data we provide evidence of a negative curvilinear relation between fund performance and ethical screening intensity consistent with a return trade off to being more ethical

the heterogeneity of socially responsible investment many writers have commented on the heterogeneity of the socially responsible investment sri movement however few have actually tried to understand and explain it and even fewer have discussed whether the opposite standardisation is possible and desirable in this article we take a broader perspective on the issue of the heterogeneity of sri we distinguish between four levels on which heterogeneity can be found the terminological definitional strategic and practical whilst there is much talk about the definitional ambiguities of sri we suggest that there is actually some agreement on the definitional level there are at least three explanations which we suggest can account for the heterogeneity on the other levels cultural and ideological differences between different regions differences in values norms and ideology between various sri stakeholders and the market setting of sri discussing the implications of the three explanations for the sri market we suggest that there is reason to be sceptical about the possibilities of standardisation if not standardisation is imposed top down whether this kind of standardisation is desirable or not we argue depends on what the motives for it would be to the extent that standardisation may facilitate the mainstreaming of sri it could be a good thing but we entertain doubts about whether mainstreaming really requires standardisation

corporate social and financial performance an investigation in the u k supermarket industry the comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years the results while broadly conclusive of a positive relationship are not entirely consistent in addition most of the previous studies have concentrated on large scale cross industry studies and often with a single variable for corporate social performance in order to produce statistically significant results this weakens the richness of understanding that might be obtained from a single industry study with multiple social variables which would also allow investigation of inter relationships between individual and sub sets of social performance measures and between individual and sub sets of social performance and financial performance measures there have also been criticisms that the results lack a rigorous theoretical basis and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research following a review of the literature this paper presents the initial findings from a study of the u k supermarket industry which suggest that contemporaneous social and financial performance are negatively related while prior period financial performance is positively related with subsequent social performance positive relationships between both age and size of the company with social performance are also found

globalization and the good corporation a need for proactive co existence large corporations are coming under intense pressure to act in a socially responsible manner corporations have accepted this notion provided that it is exercised voluntarily it has also been argued that corporations can do well by doing good and that good ethics is good business this paper presents an alternative viewpoint by demonstrating that while voluntary socially responsible conduct is desirable it plays a rather small role in inspiring good corporate conduct instead a it is the external economic competitive conditions that define the parameters and opportunities for good corporate conduct and b the values and traditions of the corporations and their perceived risk in exploiting those opportunities that influence the extent of a corporation s socially responsible conduct the framework presented here analyzes certain market competitive conditions which determine the scope and direction of socially responsible corporate conduct and the instruments available to society to enhance ethical corporate conduct it suggests that from society s perspective we should move away from the notion of corporate social responsibility and toward corporate social accountability most modern economies operate under conditions of imperfect competition where corporations gain above normal profits i e market rent from market imperfections therefore corporations should be held accountable for a more equitable distribution of these above normal profits with other groups e g customers employees etc who were deprived of their market based gains because of market imperfections and corporate power three approaches are suggested for measuring corporate accountability through corrections these are information imbalance bargaining power imbalance and adjudication remedy and relief imbalance

determinants of portfolio performance in order to delineate investment responsibility and measure performance contribution pension plan sponsors and investment managers need a clear and relevant method of attributing returns to those

what good does doing good do the effect of bond rating analysts corporate bias on investor reactions to changes in social responsibility in this study we explore how investors reconcile information on firms social responsibility with analysts assessments of future firm risk in the pricing of long term bonds we ask whether investors pay attention to small strides toward and or small slips away from socially responsible behavior arguing that analysts corporate bias toward gains and against losses influences investor reactions to corporate social responsibility we hypothesize that analysts notice and reward improvements in social responsibility yet excuse lapses we find support for this hypothesis using a unique dataset of long term bonds that combines lagged measures of firm level financial and social performance with bond specific data pertaining to risk of default and pricing the empirically robust asymmetry in investor responses to small but often cumulative increases versus decreases in corporate social responsibility reveals an under examined root cause of longer term larger scale distortions in financial market returns regarding corporate social performance our findings elaborate earlier behavioral research on how corporate bias influences analysts short term assessments of economic risk by theorizing why this corporate bias may influence long term assessments of social risk our work also motivates more critical scrutiny of the role analysts play in revising the future risk of today s social action versus inaction

understanding socially responsible investing the effect of decision frames and trade off options over the past two decades the phenomenon of socially responsible investing has become more widespread however knowledge about the individual socially responsible investor is largely limited to descriptive and comparative accounts the question of why do some investors practice socially responsible investing and others don t is therefore still largely unanswered to address this shortcoming in the current literature this paper develops a model of the decision to invest socially responsibly that is grounded in the cognition literature the hypotheses proposed in the model are tested with an experimental survey the results indicate that the framing of the investing situation influences the likelihood of engagement in socially responsible investing and how much return the individuals are willing to sacrifice when choosing socially responsible over conventional investments the study does not find support for a relationship between expectations about corporate social responsibility and the likelihood of engagement in socially responsible investing

deal structuring in philanthropic venture capital investments financing instrument valuation and covenants philanthropic venture capital phvc is a financing option available for social enterprises that like traditional venture capital provides capital and value added services to portfolio organizations differently from venture capital phvc has an ethical dimension as it aims at maximizing the social return on the investment this article examines the deal structuring phase of phvc investments in terms of instrument used from equity to grant valuation and covenants included in the contractual agreement by content analyzing a set of semi structured interviews and thereafter surveying the entire population of phvc funds that are active in europe and in the united states findings indicate that the non distribution constraint holding for non profit social enterprises is an effective tool to align the interests of both investor and investee this makes the investor behaving as a steward rather than as a principal conversely while backing non profit social ventures philanthropic venture capitalists structure their deal similarly as traditional venture capital as the absence of the non distribution constraint makes such investments subject to moral hazard risk both in terms of perks and stealing and social impact focus

an incentive compatible conjoint ranking mechanism a simple method for making ranking based conjoint analysis incentive compatible is proposed the incentive compatible mechanism involves people purchasing a product profile with a probability proportional to its assigned rank in an empirical application related to consumer preferences for beef attributes we find that the forecasted market share for a new pasture raised steak obtained using incentive compatible rankings was significantly greater than that implied from traditional hypothetical conjoint rankings people s rankings of ground beef products were not affected by the mechanism or by information about pasture raised beef copyright 2008 oxford university press

the message and methods of ethical investment abstract this paper examines a high profile and often provocative segment of the financial industry that of ethical or socially responsible investment by offering an ethical or sustainable product which has the potential to influence so many stakeholders the financial industry is in a unique position to guide change towards corporate sustainability however what message is ethical investment really giving to companies and the financial industry are ethical investors and their rating agencies capable of effectively influencing corporations towards more sustainable patterns of production and consumption and are their approaches consistent with the principles of cleaner production this paper first gives an overview some of the definitions ethical investment and the scale of activities under this umbrella term then the actual screening methods and their application is examined a typology of the different ethical mutual funds is given and two cases of ethical funds are described robur s environmental fund and sustainable asset management s sustainability rating tool each are analysed in terms of their potential to either reveal or conceal cleaner production innovations by the firms they assess in order to ascertain where ethical investment might lead companies the effects of ethical investment on companies and back on the asset management companies themselves is explored a reflexive model of corporate and finance sector learning based on the ethical screens is proposed

diagnosing measurement equivalence in cross national research many researchers have pointed out that it is necessary to ensure measurement equivalence in cross national comparative research three aspects of measurement equivalence translation metric and calibration equivalence are necessary to establish the cross national reliability and validity of items used to measure theoretical constructs this paper discusses these issues and proposes two recently developed empirical techniques multiple group lisrel and optimal scaling for use in diagnosing cross national measurement equivalence these techniques are illustrated by reanalysis of a pioneering u s and japanese study the two techniques yield convergent results indicating measurement equivalence for some but not all ordinal level items under consideration the findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed

are ceos really paid like bureaucrats a common view is that there is little correlation between firm performance and ceo pay using a new fifteen year panel data set of ceos in the largest publicly traded u s companies we document a strong relationship between firm performance and ceo compensation this relationship is generated almost entirely by changes in the value of ceo holdings of stock and stock options in addition we show that both the level of ceo compensation and the sensitivity of compensation to firm performance have risen dramatically since 1980 largely because of increases in stock option grants

the development and impact of marketing capabilities in central europe the industrial organisation and evolutionary economics traditions in international business and the resource based view of the firm in strategic management provide a rich and related set of perspectives on the question of performance in an international environment this paper draws on these perspectives to examine the nature of marketing capabilities across a range of firm types in hungary poland and slovenia a number of key strategic capabilities are examined including market orientation the time horizon of strategic decision making and positioning capability the study finds that firms with foreign participation have been able to develop a sophisticated level of marketing capability with a resulting positive impact on financial and market performance wholly owned subsidiaries and international joint ventures emerge as equally effective mechanisms for the transfer of marketing capability conclusions are drawn and implications from the research are outlined

the maturing of socially responsible investment a review of the developing link with corporate social responsibility this paper reviews the development of socially responsible investment sri over recent years and highlights the prospects for an increasingly strong connection with the practice of corporate social responsibility the paper argues that not only has sri grown significantly it has also matured in particular it has become an investment philosophy adopted by a growing proportion of large investment institutions this shift in sri from margin to mainstream and the position in which institutional investors find themselves is leading to a new form of sri shareholder pressure although this bears some resemblance to lobbying campaigns which might take advantage of shareholder rights we seek to distinguish it as an important phenomenon in its own right one to which corporate executives are likely to be paying increasing attention in the years to come we further argue that this approach potentially meets some of the earlier ethical criticisms of certain forms of sri but ironically probably owes its existence to those pioneering approaches we conclude with some suggestions for further research to inform discussion of the issues highlighted in the paper

are investors willing to sacrifice cash for morality the paper uses questionnaire responses provided by a sample of ethical investors to investigate willingness to sacrifice ethical considerations for financial reward the paper examines the amount of financial reward necessary to cause an ethical investor to accept a switch from good ethical performance to poor ethical performance conjoint analysis is used to allow quantification of the utilities derived from different combinations of ethical and financial performance ethical investors are shown to vary in their willingness to sacrifice ethical for financial performance and hence to display more heterogeneity than the all encompassing ethical label implies because of the existence of sub groups of ethical investors with different attitudes towards financial reward an attempt has been made to associate observable investors characteristics with their level of willingness to trade off morality for cash one sub group of investors in particular appears highly resistant to the idea of accepting higher financial return as compensation for poor ethical performance this unwillingness casts doubt on jensen and meckling s widely reported claim that trade off behaviour is ubiquitous in all areas of life

the theory and econometrics of health information in cross sectional nutrient demand analysis understanding the role of health information in food and nutrient demand has become an important issue over the last decade endogeneity and measurement error are two empirical problems that are inherent in this type of analysis while some type of instrumental variables estimation would appear the obvious solution this article provides several theoretical and empirical reasons why this is not the case in cross sectional analysis an alternative estimation strategy is pursued an empirical example is given and the implications are discussed copyright 2001 oxford university press

the choice architecture of sustainable and responsible investment nudging investors toward ethical decision making this paper applies insights from behavioral economics and nudge theory to foster sustainable and responsible investment sri sri provides an opportunity to express and promote ethical values via choice of financial instruments while policy makers have tried to encourage greater participation in sri the majority of retail investors retain a conventional approach to investment i develop a conceptual framework to improve the effectiveness of sri policy making the first part of the framework comprises a transmission mechanism which emphasizes the role of sri as a driver for sustainable development the second part is a model of the individual decision for or against sri the framework suggests that low sri demand is a case of behavioral market failure and that nudging is a suitable tool for dismantling behavioral barriers to sri a specific example of smart choice architecture is used to illustrate the framework s potential in the design of an sri nudge assuming the nudge stands up to the rigors of empirical testing it may well provide a feasible alternative for policy makers

drivers of socially responsible investing a case study of four nordic countries in this study we try to establish what determines the substantial differences in the nordic countries size and composition of socially responsible investing sri we investigate if these differences between denmark finland norway and sweden can be associated with key characteristics in economics finance culture and institutions we find that in particular economic openness the size of the pension industry and cultural values of masculinity femininity and uncertainty avoidance can be associated with the differences in sri in the four countries on basis of these findings we lay foundations for an international theory of sri

traffic lights and food choice a choice experiment examining the relationship between nutritional food labels and price in this paper we investigate how consumers respond to the uk nutritional food label traffic light system tls employing a choice experiment ce we find that consumers appear to behave in a manner consistent with our expectations regarding the impact of the tls we identify a strong preference on the part of respondents to avoid a basket of goods containing a mix of foods with any red lights in addition we find that consumers have a hierarchy of importance in terms of perception of the various nutrients examined and there are clear behavioural differences associated with particular socio economic characteristics confirming early research on the use of nutrition labels overall our results indicate significant heterogeneity in the attitudes and responses of consumers to the tls nutritional food labels within and across socio economic strata

where ricardo and mill rebut and confirm arguments of mainstream economists supporting globalization most noneconomists are fearful when an emerging china or india helped by their still low real wage rates outsourcing and miracle export led developments cause layoffs from good american jobs this is a hot issue now and in the coming decade it will not go away prominent and competent mainstream economists enter into the debate to educate and correct warm hearted protestors who are against globalization here is a fair paraphrase of the argumentation that has been used recently by alan greenspan jagdish bhagwati gregory mankiw douglas irwin and economists john or jane doe spread widely throughout academia yes good jobs may be lost here in the short run but still total u s net national product must by the economic laws of comparative advantage be raised in the long run and in china too the gains of the winners from free trade properly measured work out to exceed the losses of the losers this is not by mysterious fuzzy magic but rather comes from a sharing of the trade induced rise in total global vectors of the goods and services that people in a democracy want never forget to tally the real gains of consumers alongside admitted possible losses of some producers in this working out of what schumpeter called creative capitalist destruction correct economic law recognizes that some american groups can be hurt by dynamic free trade but correct economic law vindicates the word creative destruction by its proof sic that the gains of the american winners are big enough to more than compensate the losers

slow money in an age of fiduciary capitalism abstract in the era of fiduciary capitalism investors have begun fulfilling non financial goals in order to address the concerns of a broader range of stakeholders socially responsible investors who were part of fringe movements headed by non profit organizations have emerged as powerful fiduciaries with a strong focus on triple bottom line based outcomes the slow money movement which has been spear headed by non profits in the developed world places a strong emphasis on making capital circulate locally especially within agricultural communities slow money investors across the us some of whom are private investment funds and community development financial institutions are striving to generate triple bottom line based outcomes in our study we have discussed how the slow money movement mirrors fiduciary capitalism we have analyzed how slow money investors have expanded the scope of traditional fiduciary obligations five organizations in the us have participated in our research and we developed a seven point taxonomy of slow money to analyze our findings our findings revealed how slow money investors as fiduciary capitalists generate financial social and environmental returns by investing patient capital in agriculture and local enterprises

investing in socially responsible companies is a must for public pension funds because there is no better alternative with assets of over us 1 0 trillion and growing public pension funds in the united states have become a major force in the private sector through their holding of equity positions in large publicly traded corporations more recently these funds have been expanding their investment strategy by considering a corporation s long term risks on issues such as environmental protection sustainability and good corporate citizenship and how these factors impact a company s long term performance conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and therefore their investment criteria must be based strictly on narrowly defined financial measures it is also asserted that well established financial measurements of corporate performance already include long term risk assessment through discounted present value of future flow of earnings consequently all other criteria are contrary to the best interest of the pension funds beneficiaries in this paper we assert that contrary to conventional wisdom pension funds and for that matter other mutual funds must be concerned with the long term survival and growth of corporations these measures are generally referred to socially responsible investing sri and when applied to corporations it is termed socially responsible corporate conduct srcc we demonstrate that current measurement of future risk assessment invariably understates and quite often completely overlooks these long term risks because of the inherent bias towards short run on the part of financial intermediaries whose compensation depends greatly on short term results furthermore there is ample evidence to suggest that these intermediaries have been engaging in self serving practices and thus failing in their duties to serve their clients i e pension funds best interests because of their large holdings in the total market as well as individual companies these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets hence they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long term aspects of their operations in terms of their impact on environment sustainability and community welfare to name a few we argue that an exclusionary and even a primary focus on short term financial criteria is no longer a viable option it also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance thus socially responsible investing practices are not merely discretionary and desirable activities they are a necessary imperative which both the corporations and public pension funds and other large institutional holders will ignore at serious peril to themselves finally the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities it also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long term corporate survival and growth in the context of a changing economic environmental and socio political dynamic

translation in cross language international business research beyond equivalence in this paper we problematise the way translation has been treated in international business ib research we start by conducting an interpretive content analysis of both qualitative and quantitative cross language studies published in four core ib journals over the course of a decade our analysis shows the dominance of a technicist view of translation associated with the equivalence paradigm in contrast we advocate a shift to a more contextualised approach informed by theoretical developments in translation studies more specifically we focus on two theoretical perspectives skopos theory and cultural politics which offer related but distinct approaches to rethinking equivalence we conclude by advocating that the translation process be reframed as a process of intercultural interaction rather than a lexical transfer of meaning this reconceptualisation would we argue open up what is currently a black box in most ib studies the contextualised approach that we offer has the potential not just to enrich the findings of studies but also provide insights that are of multidisciplinary relevance

support for investor activism among u k ethical investors an important goal of ethical investment is to influence companies to improve their ethical and environmental performance the principal means that many ethical funds employ is passive market signalling which may not on its own have a significant effect a much more promising approach may be active engagement this paper reports on a questionnaire study of a sample of 1146 ethical investors in order to assess whether u k ethical investors would support more activist ethical investment and whether they would be prepared to invest in companies which are failing ethically in order to do so the results show general support for the current practice of passive signalling accompanied by soft engagement in the form of lobbying and the development of dialogue in order to improve corporate practice the harder options of investing in companies that err in order to change them is however favoured by consistent minorities

how do family strategies affect fund performance when performance maximization is not the only game in town abstract this is a first attempt to study how the structure of the industry affects mutual fund behavior i show that industry structure matters the mutual fund families employ strategies that rely on the heterogeneity of the investors in terms of investment horizon by offering the possibility to switch across different funds belonging to the same family at no cost i argue that this option acts as an externality for all the funds belonging to the same family affecting the target level of performance the family wants to reach and the number of funds it wants to set up by using the universe of the u s mutual fund industry i empirically confirm this intuition i find evidence of family driven heterogeneity among funds and show that families actively exploit it i argue that the more families are able to differentiate themselves in terms of non performance related characteristics the less they need to compete in terms of performance product differentiation i e the dispersion in the services fees performance that the competing funds offer affects performance and fund proliferation in particular i show that the degree of product differentiation negatively affects performance and positively affects fund proliferation

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

saving for retirement without harming others this article discusses moral issues raised by defined contribution retirement plans specifically 401 k plans in the united states the primary aim is to defend the claim that the federal government ought to require 401 k plans to include a range of socially responsible investment sri options the analysis begins with the minimal assumption that corporations engage in behavior that imposes morally impermissible harms on others with sufficient regularity to warrant attention after motivating this assumption i argue that individual investors typically share in the responsibility for the harms imposed by corporations in which they invest and that they therefore have a moral obligation to incorporate considerations of social responsibility into their investment decisions when possible to avoid being complicit in morally impermissible corporate behavior i further argue that individuals are subject to substantial institutional and structural pressures that create a powerful incentive to invest in 401 k plans even though such plans typically lack any sri options to eliminate this pressure to commit indirect harm in the process of saving for retirement i recommend that the federal government requires 401 k plans to incorporate a range of sri options and i defend this proposal from several possible objections

socially responsible investing in the united states socially responsible investing sri has emerged in recent years as a dynamic and quickly growing segment of the u s financial services industry involving over 2 trillion in professionally managed assets its conceptual origins can be found in the early history of civilization with it s modern roots in the 1960s this paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing describes the investment strategies that together define sri as currently practiced in the u s offers several observations about some of the factors fueling its dramatic growth and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns sri has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor s personal values institutional mission and or social priorities the socially responsible investment industry in the unitedstates is a young phenomenon even referring to it as an industry ten years ago may have been a bit of a stretch while it has grown dramatically in recent years it is an area of work of study and of practical application that continues to evolve in many significant ways one intriguing example of the ongoing development of the field can be found in the analysis of the language used to describe it the terms social investing socially responsible investing ethical investing socially aware investing socially conscious investing green investing values based investing and mission based or mission related investing all refer to the same general process and are often used interchangeably

elevating the role of divestment in socially responsible investing the divest movement has focused attention on strategic and ethical differences in the practice of socially responsible investing sri and highlighted an unnecessary bifurcation of best of class engagement and divestment although best of class engagement is favored as a contemporary and pragmatic approach this paper calls for a more pronounced recognition of absolute dealbreakers and divestment as an underpinning for best of class engagement after linking divestment and best of class engagement to their foundations of absolutism and relativism respectively i critique best of class engagement and argue that without a distinct and explicit role for divestment best of class strategies are ethically and strategically fraught following a discussion of which types of issues suggest divestment or best of class engagement i identify the norway government pension fund as a noteworthy example and posit that divestment and engagement are best presented and employed in tandem particularly for issues that have yet to be addressed by law and convention

the dependence of pay performance sensitivity on the size of the firm i analyze the relationship between firm size and the extent to which executive compensation depends on the wealth of the firm s shareholders i use a simple agency model to motivate an econometric model of this relationship estimating this model on chief executive officer ceo compensation data using nonlinear least squares i determine that pay performance sensitivity as defined by jensen and murphy 1990b appears to be approximately inversely proportional to the square root of firm size however measured i also analyze the properties of pay performance sensitivity for teams of executives working for the same firm and show it to have similar properties as ceo pay performance sensitivity

economics food choices and nutrition abstract our goal in this paper is to examine the role and influence of economic factors defined rather broadly on consumer food choices and hence nutritional outcomes we attempt to do this in a non technical fashion we examine the role of prices especially as they relate to the affordability of food in the united states and as a policy lever income is analyzed as a driving force behind changes in eating habits in particular increasing the demand for convenience the role of time constraints as well as time preference are examined as links to healthy eating habits and as forces behind current trends in eating patterns information and knowledge are given prominent play as counter balances to economic forces driving eating habits we conclude with and examination into maternal nutrition knowledge and children s dietary quality

socially responsible investment in the spanish financial market this paper reviews the development of socially responsible investment sri in the spanish financial market the year 1997 saw the appearance in spain of the first sri mutual fund but it was not until late 1999 that major spanish fund managers offered sri mutual funds on the retail market the development of sri in the spanish financial market has not experienced the high levels of development seen in other european countries such as france or italy where interest in sri began during the same period this paper presents an analysis of the impact of sri mutual funds managed by spanish fund managers comparing the evolution of managed assets and number of investors we also analyse the investment strategies adopted by these funds which mainly use negative screening criteria and the participation of non governmental organisations as institutional investors an analysis of the take up of socially responsible investment in the spanish financial market shows majors deficits in this process this is due to spanish investors having limited sensitivity to social issues and knowledge of sri and a lack of development of sri investment strategies such as engagement or shareholder activism by fund managers furthermore the take up of sri mutual funds in the spanish financial market coincided with a fall in the stock market at the beginning of the 21st century we conclude with an analysis of the relationship between sri and corporate social responsibility csr

selection of socially responsible portfolios using hedonic prices this research presents a novel framework for selecting socially responsible investment sri portfolios the hedonic price method hpm is applied to obtain an evaluation of sri criteria that is integrated into a multi objective mathematical programming model this approach allows us to obtain a portfolio whose financial performance is similar to which the investor would have reached if he or she had not taken into account social ethical and environmental see characteristics when making his or her investment decisions this methodology is applied to portfolios composed of socially responsible and conventional mutual funds domiciled in spain

coming out of the niche social banking in germany an empirical analysis of consumer characteristics and market size the social banking market constitutes a small but rapidly growing submarket of the global banking sector due to an explicit commitment to sustainability social banking is a segment of banking services which is not exclusively focused on economic performance criteria but pursues ecological and social goal dimensions on an equal footing information on the number and reachability of potential social banking customers is essential for social banks to further promote sustainable consumption in finance in scientific research social banking is considered a relatively new field still lacking empirical analyses regarding the market size and specific consumer behaviour this study addresses the research gap by generating first insights into the german social banking market based on an online survey using an adaptive conjoint analysis a large data set covering 3537 respondents was compiled sample 1 comprises 2896 respondents who are customers of three major social banks in germany sample 2 covers the remaining 641 respondents who represent the german adult population and exclusively buy from conventional banks logistic regression modelling reveals that social banking customers differ significantly from their conventional counterparts regarding several socio demographic behavioural and psychographic factors in comparison with conventional banking customers social banking customers tend to be younger higher educated and located in larger places of residence contrary to existing research on socially responsible investors they are male to a higher proportion than female moreover social banking customers demonstrate stronger sustainable buying patterns and weaker preferences for financial but stronger preferences for social return than conventional banking customers the results further indicate a considerable untapped growth potential for social banks by uncovering a market size ranging between 10 and 26 of the german adult population finally suggestions for marketing strategies and future research are given

an empirical examination of institutional investor preferences for corporate social performance this study investigates the pattern of institutional shareholding in the u k and its relationship with socially responsible behavior by companies within a sample of over 500 uk companies we estimate a set of ownership models that distinguish between long and short term investors and their largest components and which incorporate both aggregated and disaggregated measures of corporate social performance csp the results suggest that long term institutional investment is positively related to csp providing further support for earlier studies by johnson and greening 1999 academy of management journal 42 564 576 and graves and waddock 1994 academy of management journal 37 1034 1046 disaggregation of csp into its constituent components suggests that the pattern of institutional investment is also related to the form which csp takes investigation of the impact of investment screens on the selection of stocks suggests that long term institutional investors select primarily through exclusion rejecting those firms which have the worst csp