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The real effects of sustainable & responsible investing?

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  • Vanwalleghem, Dieter

Abstract

Sustainable and responsible investing (SRI) may have a mixed effect on firms’ incentives to remove negative externalities. Whereas SRI screening incentivizes the removal of externalities, SRI trading can disincentivize it when traders disagree on the externality removal’s cash flow effects.

Suggested Citation

  • Vanwalleghem, Dieter, 2017. "The real effects of sustainable & responsible investing?," Economics Letters, Elsevier, vol. 156(C), pages 10-14.
    • Handle: RePEc:eee:ecolet:v:156:y:2017:i:c:p:10-14
    DOI: 10.1016/j.econlet.2017.04.008
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    References listed on IDEAS

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    1. Shameek Konar & Mark A. Cohen, 2001. "Does The Market Value Environmental Performance?," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 281-289, May.
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    Cited by:

    1. Renström, Thomas I. & Spataro, Luca & Marsiliani, Laura, 2021. "Can subsidies rather than pollution taxes break the trade-off between economic output and environmental protection?," Energy Economics, Elsevier, vol. 95(C).
    2. Gaurav Talan & Gagan Deep Sharma, 2019. "Doing Well by Doing Good: A Systematic Review and Research Agenda for Sustainable Investment," Sustainability, MDPI, vol. 11(2), pages 1-16, January.
    3. Vanwalleghem, Dieter & Mirowska, Agata, 2020. "The investor that could and would: The effect of proactive personality on sustainable investment choice," Journal of Behavioral and Experimental Finance, Elsevier, vol. 26(C).
    4. Renström, Thomas I. & Spataro, Luca & Marsiliani, Laura, 2019. "Optimal Taxation, Environment Quality, Socially Responsible Firms and Investors," International Review of Environmental and Resource Economics, now publishers, vol. 13(3-4), pages 339-373, September.
    5. Salvi, Antonio & Giakoumelou, Anastasia & Bertinetti, Giorgio Stefano, 2021. "CSR in the bond market: Pricing stakeholders and the moderating role of the institutional context," Global Finance Journal, Elsevier, vol. 50(C).
    6. Arnold, Lutz G., 2023. "On the neutrality of socially responsible investing," Theoretical Economics, Econometric Society, vol. 18(1), January.
    7. Arnold, Lutz, 2019. "On the Neutrality of Socially Responsible Investing," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203534, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Sustainable and responsible investing; Externality; Asymmetric information; Open disagreement; Cost of capital;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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