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Performance of Socially Responsible Stocks Portfolios – The Impact of Global Financial Crisis

Journal of Economics and Business Research

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Field Value
 
Title Performance of Socially Responsible Stocks Portfolios – The Impact of Global Financial Crisis
 
Creator Tripathi, Vanita
Bhandari, Varun
 
Subject Socially Responsible Investing, ESG Index, GREENEX Index, Dummy Variable, Market Model, Fama-French Three Factor Model
 
Description For the effective and better implementation of CSR law, development of SRI market in the investment world is essential. Unless the investors turn socially responsible, CSR principles cannot be enforced in practice. This paper examines whether the companies that are socially responsible are performing better than general companies in terms of risk, return and various risk-adjusted measures during pre-crisis, crisis and post-crisis periods. We find that despite having higher risk, socially responsible stocks portfolios generated significantly higher returns and hence outperformed other portfolios on the basis of all risk-adjusted measures, as well as net selectivity returns during crisis period. The results uphold even with the use of Fama-French three factor model for estimating excess returns. Besides augmenting existing literature, our results clearly corroborate the fact that investors can derive benefits by investing in socially responsible companies (especially in crisis period). The study supports the view that socially responsible products can be used as a safe investment vehicle by investors during adversity. Therefore, regulators, policy makers and mutual funds should construct and make available various socially responsible investment products to initiate the movement of socially responsible investing in India.
 
Publisher Journal of Economics and Business Research
 
Contributor —
 
Date 2016-09-14
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.uav.ro/jour/index.php/jebr/article/view/692
 
Source Journal of Economics and Business Research; Vol 22, No 1 (2016): J of Economics and Business Research; 42 - 68
2069-9476
2068-3537
 
Language eng
 
Relation http://www.uav.ro/jour/index.php/jebr/article/view/692/pdf
 
Rights Copyright (c) 2016 Journal of Economics and Business Research