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Identifying the Determinants of the Decision to Create Socially Responsible Funds: An Empirical Investigation

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  • Jonathan Peillex

    (University of Picardie Jules Verne)

  • Loredana Ureche-Rangau

    (University of Picardie Jules Verne)

Abstract

This paper proposes an empirical assessment of the main factors behind the decision of a corporate sponsor to launch a socially responsible (SR) fund. Our analysis is performed on a database that encompasses 414 SR fund creations by 46 corporate sponsors between 1990 and 2012. We provide evidence that economic and human resources slack, leverage, low media coverage and high extra-financial performance of the corporate sponsor contribute to an increase of the probability to propose SR funds. These results lead us to argue that the introduction of such funds goes beyond the economic objective of enlarging the market share of the corporate sponsor. It may thus be seen as a particular strategy in terms of communication and signaling, due to the specific characteristics of SR funds.

Suggested Citation

  • Jonathan Peillex & Loredana Ureche-Rangau, 2016. "Identifying the Determinants of the Decision to Create Socially Responsible Funds: An Empirical Investigation," Journal of Business Ethics, Springer, vol. 136(1), pages 101-117, June.
    • Handle: RePEc:kap:jbuset:v:136:y:2016:i:1:d:10.1007_s10551-014-2507-y
    DOI: 10.1007/s10551-014-2507-y
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    3. Stephanie Collet & Kim Oosterlinck, 2019. "Denouncing Odious Debts," Journal of Business Ethics, Springer, vol. 160(1), pages 205-223, November.
    4. Peillex, Jonathan, 2022. "Comment expliquer la décision de création d’un fond éthique ? [What explain the creation of ethical funds?]," MPRA Paper 115067, University Library of Munich, Germany.
    5. Francesco Gangi & Lucia Michela Daniele & Nicola Varrone & Francesca Vicentini & Maria Coscia, 2021. "Equity mutual funds' interest in the environmental, social and governance policies of target firms: Does gender diversity in management teams matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(3), pages 1018-1031, May.
    6. Peillex, Jonathan, 2023. "Réaction des investisseurs à la création de fonds éthiques [Investor reaction to the creation of ethical funds]," MPRA Paper 118930, University Library of Munich, Germany.
    7. Alexandra Huang, 2019. "Déterminants des encours nationaux socialement responsables : Une analyse exploratoire internationale," Working Papers hal-02242796, HAL.
    8. El Ouadghiri, Imane & Guesmi, Khaled & Peillex, Jonathan & Ziegler, Andreas, 2021. "Public Attention to Environmental Issues and Stock Market Returns," Ecological Economics, Elsevier, vol. 180(C).
    9. Egli, Florian & Schärer, David & Steffen, Bjarne, 2022. "Determinants of fossil fuel divestment in European pension funds," Ecological Economics, Elsevier, vol. 191(C).
    10. Barda, Kelly, 2020. "Analyser la performance financière des indices boursiers environnementaux [Analyzing financial performance of green stock market indices]," MPRA Paper 102537, University Library of Munich, Germany.
    11. Mendiela, Pauline, 2021. "Information security breaches and financial market reaction: the French case," MPRA Paper 105029, University Library of Munich, Germany.
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    13. Delâtre, Chloë, 2022. "Désinvestissement des combustibles fossiles: quelles conséquences pour la gestion de portefeuille ? [Fossil fuel divestment and portfolios implications]," MPRA Paper 114633, University Library of Munich, Germany.

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