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The impact of socially responsible investing: Evidence from stock index redefinitions

Author

Listed:
  • Gunther Capelle-Blancard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Couderc

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article attempts to assess the impact of Socially Responsible Investing (SRI) on stock prices, and thus the pressure exerted on firms. To do so, the effects on stock prices of inclusion in and exclusion from SRI indexes are measured. This study draws on an event study carried out from 827 stock index redefinitions for three SRI index families: FTSE4Good, DJSI, and Aspi. The authors find that no significant impact results from the announcement of such redefinitions, except for the Aspi index. But stocks included in SRI indexes experience a temporary and significant positive abnormal return, which attests to the influence of SRI passive funds managers. Also, it appears that this short-term impact is stronger for U.S. firms, which is consistent with the respective national weights of the SRI practices.

Suggested Citation

  • Gunther Capelle-Blancard & Nicolas Couderc, 2009. "The impact of socially responsible investing: Evidence from stock index redefinitions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00390979, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00390979
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    Cited by:

    1. Imran Abbas Jadoon & Akhter Ali & Usman Ayub & Muhammad Tahir & Raheel Mumtaz, 2021. "The impact of sustainability reporting quality on the value relevance of corporate sustainability performance," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(1), pages 155-175, January.
    2. Yukiko Hashimoto & Mahesh Thakur, 2014. "Measurement of CSR Performance of the Corporate Located in Talegaon Industrial Belt, Pune, India," Eurasian Journal of Business and Management, Eurasian Publications, vol. 2(1), pages 14-23.
    3. Gunther Capelle-Blancard & Aurélien Petit, 2019. "Every Little Helps? ESG News and Stock Market Reaction," Journal of Business Ethics, Springer, vol. 157(2), pages 543-565, June.
    4. 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).
    5. Alexis Cellier & Pierre Chollet & Souad Lajili Jarjir, 2013. "New empirical evidence on market reactions to changes in Socially Responsible Investment indexes," Post-Print hal-01367120, HAL.
    6. Oscar V. De la Torre Torres & María Isabel Martínez Torre-Enciso, 2015. "Revisión de la Inversión Sustentable en La Bolsa Mexicana Durante Periodos de Crisis," Remef - The Mexican Journal of Economics and Finance, Instituto Mexicano de Ejecutivos de Finanzas. Remef, September.
    7. Oscar V. De la Torre-Torres & Evaristo Galeana-Figueroa & José Álvarez-García, 2018. "Efficiency of the Public Pensions Funds on the Socially Responsible Equities of Mexico," Sustainability, MDPI, vol. 11(1), pages 1-18, December.
    8. Oscar V. De la Torre Torres & María Isabel Martínez Torre-Enciso, 2015. "Revisión de la Inversión Sustentable en La Bolsa Mexicana Durante Periodos de Crisis," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 10(2), pages 115-130, Julio-Dic.

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