Fulltext

Strategic sustainability and financial performance: exploring abnormal returns

Mollet, Janick ; von Arx, Urs ; Ilić, Dragan

In: Journal of Business Economics, 2013, vol. 83, no. 6, p. 577-604

Ajouter à la liste personnelle
    Titre
    • Strategic sustainability and financial performance: exploring abnormal returns
    Auteur
    • Mollet, Janick. University of Zurich, Center for Corporate Responsibility and Sustainability, Zähringerstrasse 24, 8001, Zurich, Switzerland
    • von Arx, Urs. University of Zurich, Center for Corporate Responsibility and Sustainability, Zähringerstrasse 24, 8001, Zurich, Switzerland
    • Ilić, Dragan. University of Zurich, Center for Corporate Responsibility and Sustainability, Zähringerstrasse 24, 8001, Zurich, Switzerland
    Type de document
    • Postprint
    Langue
    • Anglais
    Publié dans
    • Journal of Business Economics, 2013, vol. 83, no. 6, p. 577-604. Springer Berlin Heidelberg
    Autre version électronique
    Identifiant OAI-PMH
    • oai:doc.rero.ch:319256
    Summary
    The ongoing empirical debate about whether SRI is associated, if anything, with subpar or surpassing financial performance is characterized by a somewhat indistinct focus and the infeasibility of tapping the full potential of existing models. By indistinct focus, we mean an analysis based on an aggregation of a myriad of SRI factors that potentially affect a firm's financial performance. The inability of taking full advantage of existing models is reflected by the fact that studies with European data have not been able to comprehensively account for systematic risk tilts. This paper presents a portfolio analysis that overcomes these issues by analyzing a distinct selection of small and innovative firms. We argue that both their strategic implementation of Corporate Social Responsibility and the general growth in socially responsible investments (SRI) lend themselves to an explanation for positive abnormal returns of this portfolio. We account for the idiosyncratic investment style of SRI by introducing a comprehensive pan-European risk-adjusted portfolio analysis based on the Carhart four-factor model. A novel propensity score matching method in conjunction with the estimation of structural models completes the conventional robustness checks in the literature