“Doing Well While Doing Good” Revisited: A Study of Socially Responsible Firms' Short‐Term versus Long‐term Performance

Abstract

This article reexamines the “doing well while doing good” debate within the financial management literature, using comparisons among socially responsible mutual funds (SRMF(, the NYSE Composite Index, and a portfolio made up of firms most valued by SRMF managers )MostSRF(. The performance of MostSRF did no better or no worse than the over all market or SRMF in three to five year comparisons. However, results from the ten‐year performance comparison refute earlier studies and indicate that the market prices social responsibility characteristics in the long run. Given MostSRF out performed the other two indices in this time line, a new paradigm for understanding the impact of SRI is revealed.

Corporate Social Responsibility and Socially Responsible Investing: A Global Perspective

“…Only a limited number of studies show that socially responsible corporations are valued by investors in Corporate Social Responsibility and Socially Responsible Investing the long run relative to firms with no social agenda (see Hill et al, 2003;Shank et al, 2005). To extend this research stream, our inquiry expands investment options to three diverse geographic regions -the United States (i.e., North America), Asia, and Europe.…”

The Impacts of Social Responsibility and Ownership Structure on Sustainable Financial Development of China’s Energy Industry

“…Social responsibility balances the benefits of all stakeholders, not only on owners' current interests. Consequently, the initiative to invest in social responsibility is likely to lead to positive market response, increase the net income and strengthen the stability of overall financial development [67]. Thus, CSR has a positive impact on firm short-and long-term performance.…”

Do investors in Spain react to news on sustainability and corporate social responsibility?

“…These studies carry out comparative analyses of returns on ethical investments with those of conventional investments, either by using ethical stock indexes vs. conventional stock indexes, as in the study by Vermeir and Corten (2001); socially responsible mutual funds vs. classic mutual funds, as in the work of Statman (2000), Kreander et al (2005) and Bauer et al (2007) or by comparing returns of SRI stocks with non-SRI stocks as in Stone et al (2001), Hill et al (2003) or Shank et al (2005). Most of these studies report no significant differences between ethical and non-ethical investment returns.…”