Abstract
Today, socially responsible investing (SRI) represents the youngest financial-services industry that investors can exploit to implement their investment strategies. Although literature in this field is growing, additional research is needed to disentangle the factors affecting the performance of SRI funds. This paper focuses on the analysis of the influence that the depth of investment strategy by SRI funds may have on the investment performance, whereas larger SRI funds have a stronger capacity to address their investment choices. We used a sample of 149 USA SRI funds referring to the Social Investment Forum (SIF) Foundation in the period 2005-2010. We found that depth of investment strategy decreases the capacity of large SRI funds to reach positive financial returns if a broad sustainability investment strategy is pursued. On the other hand, SRI funds able to focus the attention on specific environmental, social, governance, or product criteria do increase their capacity to reach positive financial performance. This paper contributes to the existing literature by examining the depth of the sustainability investment strategy by SRI funds and investigating the moderating effect that peculiar investment strategies have on the well-known relation between size and performance of SRI funds. major-bidi;mso-bidi-theme-font:major-bidi;mso-ansi-language:EN-GB;mso-fareast-language: ZH-CN;mso-bidi-language:AR-SA'>This paper analyzes the wealth distribution taking into account the reaction of the market to the alliance as an indicator of a successful strategy. It explores the case of the automobile industry, which is characterised by a high use of inter-firm cooperation, such as strategic alliances and mergers & acquisitions, to effectively compete in the global market and face the global crisis.
Highlights
Today, socially responsible investing (SRI) represents the youngest financial-services industry that investors can exploit to implement their investment strategies
Relying on previous literature investigating the relationship between corporate sustainability (CS) orientation and a firm’s financial performance, this paper focuses on the analysis of the influence that the depth of the investment strategy by SRI funds may have on the investment performance
SRI funds able to focus the attention on specific ESG or product criteria do increase their capacity to reach positive financial performance
Summary
Socially responsible investing (SRI) represents the youngest financial-services industry that investors can exploit to implement their investment strategies. SRI’s modern roots originate from the 1960s (Schueth, 2003) Literature in this field is growing, additional research is needed to explain which factors do affect the implementation of corporate sustainability (CS) strategies (Sparkes & Cowton, 2004) by both firms and investors. First the direct effect that size of SRI funds has on the financial performance is investigated; the moderating effect that a deep sustainability investment strategy by SRI funds can have on the above relation is tested. Both a broad and a narrow sustainability investment strategy by SRI funds are considered; the latter referring to the well-known attitude by SRI funds to focus on detailed environmental, social, governance (ESG), and product criteria while selecting their ethical target investments
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