Abstract
This paper empirically examines and compares social responsibility investment funds to traditional funds, and explores the performance of the existing social responsibility investment funds in China. Based on 64 social responsibility investment funds (SRI Funds) and 64 traditional funds, this paper extracts the data of the sample fund from the fourth quarter of 2016 to the fourth quarter of 2019 as sample data to conduct a comparative analysis of the difference between the SRI fund and the traditional fund in terms of return and risk, and to then empirically study the performance of the funds. The results show that the difference between the return of China’s socially responsible investment funds and the traditional funds is insignificant, and the risk of socially responsible investment funds is significantly lower than that of traditional funds. The regression analysis is also carried out on a model of social responsibility as a factor affecting the performance of the funds. Subsequently, the results show that social responsibility has a significant positive impact on the fund’s return in the Chinese market.
Highlights
Sustainable development involves the use of environmentally responsible and efficient operational strategies, balancing corporate citizenship and environmental responsibilities to reward the communities in which the enterprise is located, and to protect the environmental resources that form the key success factors of the enterprise’s long-term business
The results show that the difference between the returns of social responsibility investment funds and those of traditional funds is not significant, and the risk of social responsibility investment funds is obviously lower than that of traditional funds
The originality of this paper is that we present the phenomenon of CSR in relation to the Chinese market
Summary
Sustainable development involves the use of environmentally responsible and efficient operational strategies, balancing corporate citizenship and environmental responsibilities to reward the communities in which the enterprise is located, and to protect the environmental resources that form the key success factors of the enterprise’s long-term business. Corporate social responsibility will allow it to gain a good reputation in society, attracting more investors and consumers, and increasing the potential upside for capital and profits [1]. Investment in environmental protection and employee welfare can reduce costs, increase employee motivation, and improve labor productivity. Socially responsible investments (SRI), known by researchers and practitioners as ethical or sustainable investments [2,3] are an investment process that integrates ethical values, environmental protection, improved social conditions, and good governance into traditional investment decision-making [4,5,6]. According to Witt and Redding [7], to consider an investment as an SRI, the criteria used are R&D expenditure, profitability, growth potential, payout ratio, and labor productivity growth rate. For the state, encouraging enterprises with good social responsibility performance and promoting the development of Chinese social responsibility investment will help to establish a healthy and green economic environment and a good foundation for long-term development [8]
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