Abstract

http://ssrn.com/abstract=10203
 
 

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The Effect Of Socially Activist Investment Policies On The Financial Markets: Evidence From The South African Boycott


Siew Hong Teoh


University of California - Paul Merage School of Business

Ivo Welch


University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

C. Paul Wazzan


LECG, LLC

December 1995

London Business School Institute of Finance and Accounting working paper 222

Abstract:     
Governments and vocal institutional shareholders have been exerting pressure on companies they deem to have objectionable operations (such as tobacco or chemical producers). This paper studies the effect of the most important legislative and shareholder boycott to date, the boycott of the South Africa's apartheid regime. We find that the announcement of legislative/shareholder pressure of voluntary divestment from South Africa had little discernible effect either on the valuation of banks and corporations with South African operations or on the South African financial markets. There is weak evidence that institutional shareholdings increased when corporations divested. In sum, despite the public significance of the boycott and the multitude of divesting companies, financial markets seem to have perceived the boycott to be merely a "sideshow."

Number of Pages in PDF File: 58

JEL Classification: G31, G32, G34

working papers series


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Date posted: November 11, 1996  

Suggested Citation

Teoh, Siew Hong and Welch, Ivo and Wazzan, C. Paul, The Effect Of Socially Activist Investment Policies On The Financial Markets: Evidence From The South African Boycott (December 1995). London Business School Institute of Finance and Accounting working paper 222. Available at SSRN: http://ssrn.com/abstract=10203 or http://dx.doi.org/10.2139/ssrn.10203

Contact Information

Siew Hong Teoh (Contact Author)
University of California - Paul Merage School of Business ( email )
Irvine, CA California 92697-3125
United States
Ivo Welch
University of California, Los Angeles (UCLA) ( email )
405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Christopher Paul Wazzan
LECG, LLC ( email )
2000 Powell Street, Suite 600
Emeryville, CA 94608
United States
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