Financial performance of socially responsible investing (<scp>SRI</scp>): what have we learned? A meta‐analysis

Revelli, Christophe; Viviani, Jean Laurent

doi:10.1111/beer.12076

Cited by 380 publications

(334 citation statements)

References 161 publications

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“…However, our results are not consistent with previous studies that suggest CSR has a negative effect on performance [18,19]. Those studies also found no significant CSR-performance linkage [22,23]. The results mean that synergy of CSR could also be generated in M&A activities.…”

Section: Effects Of Csr On Long-term Manda Performancecontrasting

confidence: 99%

“…The results of empirical studies regarding the economic impacts of CSR are also mixed. Some studies have found no significant relationship between CSR and a firm's economic performance [22,23]. Other studies provide evidence of a significant relationship between CSR and corporate performance [24][25][26][27].…”

Section: Corporate Social Responsibility and Firm Performancementioning

confidence: 99%

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Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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This study investigates the effects of geographical regions and related-party transactions on corporate social responsibility (CSR) and long-term mergers and acquisitions (M&A) performance linkage. We conduct a Heckman two-stage model analysis, using data from listed firms in the Shanghai and Shenzhen stock exchange markets in China. The results indicate that: (1) buyers' CSR performance has a significant and positive effect on long-term M&A performance. (2) Significant differences exist across geographical regions in the links between CSR and long-term M&A performance. In our study, the effects of CSR on long-term M&A performance were positive and significant in a sub-sample of firms located in the eastern region, but the effects were negative and insignificant in a sub-sample of firms located in regions other than in the east. (3) Related-party M&A transactions experience more positive and significant CSR long-term M&A performance linkage, compared to non-related party M&A transactions. Our findings might provide more robust evidence to CSR performance linkage, as we have examined the linkage in a special context of M&A activities, using a Heckman two-stage model to alleviate endogeneity bias. We also bring further insights into the effects of two contingent factors (geographical regions and related-party transactions) on the CSR-performance linkage. The findings of this article suggest that it is reasonable for firms to act socially responsibly when generating economic benefits. Policy makers should consider how to encourage firms to better fulfill CSR through improving the market environment and by enhancing their levels of supervision.

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Section: Effects Of Csr On Long-term Manda Performancecontrasting

confidence: 99%

Section: Corporate Social Responsibility and Firm Performancementioning

confidence: 99%

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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“…Thus, ethical investments, socially responsible investing, microcredit, and social banking have rapidly developed because financial institutions and intermediaries have enhanced their financial decision-making process by incorporating ethical choices and social objectives (Editorial "Research in International Business and Finance," 2017). The initial studies concerning this issue have questioned whether the ESG integration in financial decisions and socially responsible investment performance still rewards investors and companies through the tangible financial performance achieved by companies (Friede et al, 2015;Orlitzky, Schmidt, & Rynes, 2003) and investors (Revelli, 2017;Revelli & Viviani, 2015).…”

Section: The Impact Of Esg On Financial Decision-makingmentioning

confidence: 99%

The Linkage between ESG Performance and Credit Ratings: A Firm-Level Perspective Analysis

Devalle¹,

Fiandrino²,

Cantino³

2017

IJBM

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This paper investigates the effect of environmental, social, and governance (ESG) performance on credit ratings. We argue that ESG factors should be considered in the credit analysis and the creditworthiness evaluation of borrowers because they affect borrowers' cash flows and the likelihood of default on their debt obligations. Consequently, we develop our research by firstly reviewing the literature regarding ESG commitments within financial decision-making processes and then addressing the relation between ESG performance and the cost of debt financing. We reveal no unanimous results and no clear-cut boundaries on this matter yet. Secondly, to disentangle this relationship, which is not well defined by scholars, we empirically investigate the nexus between ESG performance and credit rating issues on a sample of 56 Italian and Spanish public firms for which ESG performance in 2015 was achieved. Our final sample includes 15 variables for 56 observations: 840 items are under analysis. Our findings suggest that ESG performance, especially concerning social and governance metrics, meaningfully affects credit ratings. We do not sort out significant results referring to environmental scores, so further research is needed to investigate this ever-growing matter and strengthen this considerable nexus.

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“…These authors pointed out that the results are highly dependent on the study methods applied in each paper. Revelli and Viviani [37], also performing a meta-analysis on these topics, confirmed that no relevant differences are found between the performances between SRI and conventional funds. The final sentence of this paper deals with a central challenge for the research in this field: "Beyond the debate on the financial performance of SRI, we need to understand how SRI modifies the behaviours of companies and investors, as well as whether this way of investing is efficient in achieving the objective of greater ethicality and social responsibility".…”

Section: Corporate Social Responsibility and Socially Responsible Invmentioning

confidence: 67%

Sustainability and Ethics in the Process of Price Determination in Financial Markets: A Conceptual Analysis

2018

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This paper explores how financial markets can support the practical applicability of Sustainability Development Goals (SDGs) principles and why ethics has a central role in this process. The efficient market hypothesis holds that a financial market is efficient when prices equate value. Extending this assertion to sustainability, it can be said that prices should become equal to sustainable value. Prices can be regarded as the addition of the present value of future expectations and the impact of short-term volatility. This property parallels the existence of two different types of shareholders: long-run shareholders, who are often involved in the management of the corporation, and short-run shareholders, who usually apply speculative strategies to the choice of their investments. The SGDs' principles are logically thought for a long-run horizon. Their impact on corporate value stems mainly from the changes they introduce in environmental and social risk, apart from becoming a potential source of innovation. Nevertheless, their effects on the short-run perspective can be very small unless either market traders assume sustainability as a goal of their own or the sustainability effects are incorporated into prices. We hold that the second issue is safer and preferable. Both involve ethics: the former would require that investors perform any trade from an ethical perspective. The latter needs that the ethical emphasis is placed on the process of price determination. The achievement of this goal demands a wide display of information on sustainability, placed together with financial information, and appropriate regulation. Its analysis considers the principles of behavioral finance.

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Financial performance of socially responsible investing (SRI): what have we learned? A meta‐analysis

Cited by 380 publications

References 161 publications

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

The Linkage between ESG Performance and Credit Ratings: A Firm-Level Perspective Analysis

Sustainability and Ethics in the Process of Price Determination in Financial Markets: A Conceptual Analysis

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