David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Business Ethics 81 (2):247 - 260 (2008)
There is currently much debate in the economic literature about whether ethical investment involves a financial sacrifice or premium. One of the most common methods of testing this compares the financial performance of ethical investment funds with that of other funds not considered “socially responsible” or ethical. The majority of these research studies evaluate the performance of the ethical funds according to classic measures, whereby different financial markets, in different countries and for different periods of time serve as reference for evaluation. The ultimate conclusion of all of these studies is that there are no significant differences between the performance results of one type of funds and the other. In Spain, ethical investment funds are still an incipient sector of investment. To date, the Spanish market has not been included in any type of analysis of these characteristics. Therefore the main objective of this article is to compare the financial performance of ethical investment funds to that of other funds in the Spanish retail market. We propose the aggregate type of analysis as the Spanish ethical investment funds have experienced a weaker development in comparison to those of other developed countries. In the first step we suggest the financial performance to be compared by style analysis since the asset distribution of the Spanish Social Return Investment (SRI) funds differs from the European trend. In particular, we use the multifactor regression model with style benchmarks. We found that their financial performance is in all cases superior or similar to that achieved by the rest of the funds. In the second step, to achieve a more robust and homogeneous comparison, we used the bootstrap method, comparing ethical and non-ethical fund subsamples by homogeneous groups. No significant differences between these two types of funds have been found. Thus, if we assume the positive o neutral effect of ethical investment on investor utility in the retail Spanish market the financial and social performance (FSP) of ethical funds will be, in aggregate, superior to the FSP achieved by conventional funds. In conclusion, the financial performance of ethical mutual funds in Spain is no sacrifice.
|Keywords||ethical investment mutual funds financial performance style analysis bootstrap method|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Chad Albrecht, Jeffery A. Thompson, Jeffrey L. Hoopes & Pablo Rodrigo (2010). Business Ethics Journal Rankings as Perceived by Business Ethics Scholars. Journal of Business Ethics 95 (2):227 - 237.
Similar books and articles
Lorne S. Cummings (2000). The Financial Performance of Ethical Investment Trusts: An Australian Perspective. [REVIEW] Journal of Business Ethics 25 (1):79 - 92.
Jacquelyn E. Humphrey & Darren D. Lee (2011). Australian Socially Responsible Funds: Performance, Risk and Screening Intensity. [REVIEW] Journal of Business Ethics 102 (4):519-535.
Greig A. Mill (2006). The Financial Performance of a Socially Responsible Investment Over Time and a Possible Link with Corporate Social Responsibility. Journal of Business Ethics 63 (2):131 - 148.
Jonas Nilsson (2008). Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior. [REVIEW] Journal of Business Ethics 83 (2):307 - 325.
Rob Bauer, Jeroen Derwall & Rogér Otten (2007). The Ethical Mutual Fund Performance Debate: New Evidence From Canada. [REVIEW] Journal of Business Ethics 70 (2):111 - 124.
Maria Ceu Cortez, Florinda Silva & Nelson Areal (2009). The Performance of European Socially Responsible Funds. Journal of Business Ethics 87 (4):573 - 588.
Stewart Jones, Sandra van der Laan, Geoff Frost & Janice Loftus (2008). The Investment Performance of Socially Responsible Investment Funds in Australia. Journal of Business Ethics 80 (2):181 - 203.
Francisco Climent & Pilar Soriano (2011). Green and Good? The Investment Performance of US Environmental Mutual Funds. Journal of Business Ethics 103 (2):275-287.
Josep M. Lozano, Laura Albareda & M. Rosario Balaguer (2006). Socially Responsible Investment in the Spanish Financial Market. Journal of Business Ethics 69 (3):305 - 316.
Javier Gil-Bazo, Pablo Ruiz-Verdú & André A. P. Santos (2010). The Performance of Socially Responsible Mutual Funds: The Role of Fees and Management Companies. [REVIEW] Journal of Business Ethics 94 (2):243 - 263.
Added to index2009-01-28
Total downloads14 ( #119,025 of 1,100,145 )
Recent downloads (6 months)1 ( #304,144 of 1,100,145 )
How can I increase my downloads?