Are Ethical Investments Good?

Posted: 14 Nov 2014

See all articles by Gariet Chow

Gariet Chow

The University of Western Australia

Robert B. B. Durand

Curtin University of Technology - School of Economics and Finance - Department of Finance and Banking

SzeKee Koh

Singapore Institute of Technology

Date Written: November 13, 2014

Abstract

Our study considers whether ethical investments are also good investments. In contrast with previous studies, we utilize long-run event study methodology to examine abnormal returns associated with firms being included in, and dropped from, the MSCI KLD400 Social Index (MSCI KLD400). We find that there are positive and statistically significant long-run abnormal returns for firms being included in the MSCI KLD400. These abnormal returns are associated with higher shareholdings by institutional investors (who are subject to higher public scrutiny), higher analyst coverage and higher growth opportunities.

Keywords: MSCI KLD400 Social Index, portfolio choice, socially responsible investing

Suggested Citation

Chow, Gariet and Durand, Robert B. B. and Koh, SzeKee, Are Ethical Investments Good? (November 13, 2014). Australian Journal of Management, Vol. 39, No. 4, 2014, FIRN Research Paper No. 2523921, Available at SSRN: https://ssrn.com/abstract=2523921

Gariet Chow (Contact Author)

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

Robert B. B. Durand

Curtin University of Technology - School of Economics and Finance - Department of Finance and Banking ( email )

Bentley 6102 WA
Australia

HOME PAGE: http://tiny.cc/y85rh

SzeKee Koh

Singapore Institute of Technology ( email )

10 Dover Drive
Singapore, 138683
Singapore

HOME PAGE: http://https://scholar.google.com.sg/citations?user=D3pyDy4AAAAJ&hl=en

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