Extant research suggests that the most significant elements of a family firm’s socioemotional wealth (SEW) can drive financial reporting decisions. This paper explores this empirically by analyzing corporate disclosures of a case organization – Guinness, a multinational family brewing firm – over an extended period. We identify the presence of the SEW dimensions in the firm’s corporate disclosures and explore the relationship between the most salient SEW dimension (family identity) and readability, measured by the Bog index. The analysis finds a positive association between family identity and readability in the period when the firm under study can be defined as a family firm. Other SEW dimensions do not appear to have an influence on readability. In addition, at the end of the period of study, when the firm under study ceased to be a family firm, the SEW dimensions failed to have an effect on readability. La investigación previa sugiere que los elementos más destacados de la riqueza socioemocional de las empresas familiares pueden influir en la información financiera divulgada por parte de las mismas. Este trabajo intenta analizar la proposición previa de forma empírica mediante el estudio de la información divulgada por parte de una empresa familiar multinacional, Guinness, durante un largo período de tiempo. En el estudio se identifica la presencia de las dimensiones de la riqueza socioemocional en la información corporativa de la empresa y se explora la relación entre la dimensión más destacada (identidad familiar) y la legibilidad. Los resultados muestran una relación positiva entre la identidad familiar y la legibilidad en el período en el que la empresa estudiada se considera una empresa familiar. El resto de las dimensiones de la riqueza socioemocional no parecen influir en la legibilidad. Además, al final del período de estudio, cuando la empresa estudiada dejó de ser una empresa familiar, las dimensiones de la riqueza socioemocional dejaron de tener un impacto en la legibilidad.
现有研究表明，家族企业的社会情感财富(SEW)中最重要的因素可以驱动财务报告决策。本文通过对跨国家族酿酒企业健力士的长期企业信息披露进行实证分析，探讨了这一问题。我们确定了SEW维度在公司公司披露中的存在，并探索了最显著的SEW维度(家庭身份)与可读性之间的关系，通过Bog指数来衡量。分析发现，当所研究的企业可以被定义为家族企业时，家族认同与可读性之间存在正相关关系。其他SEW尺寸似乎对可读性没有影响。此外，在研究结束时，当所研究的公司不再是家族企业时，SEW维度未能对可读性产生影响。La investigación previa sugiere que los elementos más destacados de La riqueza社会情感de las empresas熟悉的人在La información财务泄露gada por partite de las mismas。Este trabajo intenta analizar proposición previa de forma empírica mediante el estudio de la información泄露gada pte partite de una empresa familiar跨国公司，Guinness, durante un largo período de tiempo。En el estudio se identitica la prescia de las dimensions de la riqueza社会情感En la información corporativa de la empresa y se explora la relación entre la dimensión más destacada (identidad familiar) y la legibilidad。Los resultados muestran una relación积极中心la identidad familiar通过la legibilidad en el período和el que la empresa estudiada se考虑una empresa familiar。社会情感维度的恢复和父母对易读性的影响。Además, al final del período de estudio, quando la empresa estudiada dejó de ser una empresa familiar, las dimensions de la riqueza社会情感dejaron de tener unimpact en la legibilidad。
{"title":"The Impact of Socioemotional Wealth on Corporate Reporting Readability in a Multinational Family-Controlled Firm","authors":"Alonso Moreno, Martin Quinn","doi":"10.2139/ssrn.3918887","DOIUrl":"https://doi.org/10.2139/ssrn.3918887","url":null,"abstract":"Extant research suggests that the most significant elements of a family firm’s socioemotional wealth (SEW) can drive financial reporting decisions. This paper explores this empirically by analyzing corporate disclosures of a case organization – Guinness, a multinational family brewing firm – over an extended period. We identify the presence of the SEW dimensions in the firm’s corporate disclosures and explore the relationship between the most salient SEW dimension (family identity) and readability, measured by the Bog index. The analysis finds a positive association between family identity and readability in the period when the firm under study can be defined as a family firm. Other SEW dimensions do not appear to have an influence on readability. In addition, at the end of the period of study, when the firm under study ceased to be a family firm, the SEW dimensions failed to have an effect on readability.\u0000 La investigación previa sugiere que los elementos más destacados de la riqueza socioemocional de las empresas familiares pueden influir en la información financiera divulgada por parte de las mismas. Este trabajo intenta analizar la proposición previa de forma empírica mediante el estudio de la información divulgada por parte de una empresa familiar multinacional, Guinness, durante un largo período de tiempo. En el estudio se identifica la presencia de las dimensiones de la riqueza socioemocional en la información corporativa de la empresa y se explora la relación entre la dimensión más destacada (identidad familiar) y la legibilidad. Los resultados muestran una relación positiva entre la identidad familiar y la legibilidad en el período en el que la empresa estudiada se considera una empresa familiar. El resto de las dimensiones de la riqueza socioemocional no parecen influir en la legibilidad. Además, al final del período de estudio, cuando la empresa estudiada dejó de ser una empresa familiar, las dimensiones de la riqueza socioemocional dejaron de tener un impacto en la legibilidad.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125877194","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
April M. Knill, Joseph "Fred" Kindelsperger, A. Ovtchinnikov
This paper investigates whether and how litigant peer stock ownership by federal district judges affects characteristics of case outcomes for large corporate litigants. We find that industry-peer stock ownership by district judges is associated with the following outcomes for corporate litigants named in their assigned cases: 1) an increased likelihood of judgments for the corporate litigants, 2) a decrease in the amount received by the parties suing these corporate litigants, and 3) a decrease in the length of the litigation proceedings. The random assignment of district judges to cases provides exogenous variation in the judge stock ownership. We further identify the association outlined in our base results by examining appellate court reversals of district judgments, a triple difference analysis isolating large-stake investments, and outcomes in case types that should impact industries either cooperatively or competitively. Our results survive a falsification test as well as a battery of robustness tests. Our findings underscore the importance of mandates governing judge stock ownership, and more broadly, judge conflicts of interest.
{"title":"Stock Ownership of Federal Judges and its Impact on Corporations","authors":"April M. Knill, Joseph \"Fred\" Kindelsperger, A. Ovtchinnikov","doi":"10.2139/ssrn.3951325","DOIUrl":"https://doi.org/10.2139/ssrn.3951325","url":null,"abstract":"This paper investigates whether and how litigant peer stock ownership by federal district judges affects characteristics of case outcomes for large corporate litigants. We find that industry-peer stock ownership by district judges is associated with the following outcomes for corporate litigants named in their assigned cases: 1) an increased likelihood of judgments for the corporate litigants, 2) a decrease in the amount received by the parties suing these corporate litigants, and 3) a decrease in the length of the litigation proceedings. The random assignment of district judges to cases provides exogenous variation in the judge stock ownership. We further identify the association outlined in our base results by examining appellate court reversals of district judgments, a triple difference analysis isolating large-stake investments, and outcomes in case types that should impact industries either cooperatively or competitively. Our results survive a falsification test as well as a battery of robustness tests. Our findings underscore the importance of mandates governing judge stock ownership, and more broadly, judge conflicts of interest.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130008696","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Growing spatial inequality has led policymakers to enact tax breaks to attract corporate investment and jobs to economically peripheral regions. We demonstrate the importance of multi-plant firms' physical capital structure for the efficacy of place-based policies by studying a bonus depreciation scheme in Japan which altered the relative cost of capital across locations, offering high-tech manufacturers immediate cost deductions from their corporate income tax bill. Combining corporate balance sheets with a registry containing investment by plant location and asset type, we find the policy generated big gains in employment and investment in building construction and in machines at pre-existing production sites, with an implied fiscal cost per job created of $17,000. These responses are driven by more financially constrained firms and firms which rely on costly but long-lived capital inputs like industrial machines. The policy did not generate positive local spillovers to ineligible plants or spillovers through inter-regional trade networks. Plant-level hiring in ineligible areas outstripped that in eligible areas, suggesting firms reallocated funds from the write-offs within their internal network. How multi-plant firms react to spatially targeted tax incentives ultimately depends on their internal network and their composition of intermediate capital inputs used in production.
{"title":"Place-Based Policies and the Geography of Corporate Investment","authors":"Cameron LaPoint, Shogo Sakabe","doi":"10.2139/ssrn.3950548","DOIUrl":"https://doi.org/10.2139/ssrn.3950548","url":null,"abstract":"Growing spatial inequality has led policymakers to enact tax breaks to attract corporate investment and jobs to economically peripheral regions. We demonstrate the importance of multi-plant firms' physical capital structure for the efficacy of place-based policies by studying a bonus depreciation scheme in Japan which altered the relative cost of capital across locations, offering high-tech manufacturers immediate cost deductions from their corporate income tax bill. Combining corporate balance sheets with a registry containing investment by plant location and asset type, we find the policy generated big gains in employment and investment in building construction and in machines at pre-existing production sites, with an implied fiscal cost per job created of $17,000. These responses are driven by more financially constrained firms and firms which rely on costly but long-lived capital inputs like industrial machines. The policy did not generate positive local spillovers to ineligible plants or spillovers through inter-regional trade networks. Plant-level hiring in ineligible areas outstripped that in eligible areas, suggesting firms reallocated funds from the write-offs within their internal network. How multi-plant firms react to spatially targeted tax incentives ultimately depends on their internal network and their composition of intermediate capital inputs used in production.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129488803","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Martijn Adriaan Boermans, Ian A Cooper, P. Sercu, Rosanne Vanpée
We use the European Central Bank's new and detailed database of European equity holdings by households to test two competing theories of international biases in equity portfolios, that they reflect either informational advantages or familiarity bias. The database allows look-through handling of investments via mutual funds etc, and reveals that home bias is smaller than usually believed. We find that both home bias and foreign bias are positively associated with the Cremers et al (2009) ActiveShare measure and negatively with the fraction of the country sub-portfolio invested via mutual funds, both of which are consistent with information effects rather than familiarity bias.
{"title":"Foreign bias in equity portfolios: Informational advantage or familiarity bias?","authors":"Martijn Adriaan Boermans, Ian A Cooper, P. Sercu, Rosanne Vanpée","doi":"10.2139/ssrn.3947763","DOIUrl":"https://doi.org/10.2139/ssrn.3947763","url":null,"abstract":"We use the European Central Bank's new and detailed database of European equity holdings by households to test two competing theories of international biases in equity portfolios, that they reflect either informational advantages or familiarity bias. The database allows look-through handling of investments via mutual funds etc, and reveals that home bias is smaller than usually believed. We find that both home bias and foreign bias are positively associated with the Cremers et al (2009) ActiveShare measure and negatively with the fraction of the country sub-portfolio invested via mutual funds, both of which are consistent with information effects rather than familiarity bias.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131855555","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a quantitative framework for assessing the financial impact of any form of impact investing, including socially responsible investing (SRI), environmental, social, and governance (ESG) objectives, and other non-financial investment criteria. We derive conditions under which impact investing detracts from, improves on, or is neutral to the performance of traditional mean-variance optimal portfolios, which depends on whether the correlations between the impact factor and unobserved excess returns are negative, positive, or zero, respectively. Using Treynor-Black portfolios to maximize the risk-adjusted returns of impact portfolios, we propose a quantitative measure for the financial reward, or cost, of impact investing compared to passive index benchmarks. We illustrate our approach with applications to biotech venture philanthropy, divesting from “sin” stocks, investing in ESG, and “meme” stock rallies such as GameStop in 2021.
{"title":"Quantifying the Impact of Impact Investing","authors":"A. Lo, Ruixun Zhang","doi":"10.2139/ssrn.3944367","DOIUrl":"https://doi.org/10.2139/ssrn.3944367","url":null,"abstract":"We propose a quantitative framework for assessing the financial impact of any form of impact investing, including socially responsible investing (SRI), environmental, social, and governance (ESG) objectives, and other non-financial investment criteria. We derive conditions under which impact investing detracts from, improves on, or is neutral to the performance of traditional mean-variance optimal portfolios, which depends on whether the correlations between the impact factor and unobserved excess returns are negative, positive, or zero, respectively. Using Treynor-Black portfolios to maximize the risk-adjusted returns of impact portfolios, we propose a quantitative measure for the financial reward, or cost, of impact investing compared to passive index benchmarks. We illustrate our approach with applications to biotech venture philanthropy, divesting from “sin” stocks, investing in ESG, and “meme” stock rallies such as GameStop in 2021.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122007264","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the replenishment of 102 asset-backed securities (ABS) backed by more than 1.7 million small- and medium-sized enterprise loans. Based on our extensive data set from 2012 to 2017 obtained from the first and only central loan-level repository for ABS in Europe, we reveal that loans added to securitized loan portfolios after the transactions' closing perform worse than loans that are part of the initial portfolio. On average, we find that loans added to securitized loan portfolios demonstrate a 0.42 percentage points higher probability of default. We additionally provide evidence that originators induce these performance differences since they exploit their information advantage by deliberately adding low-quality loans to securitized loan portfolios. This adverse behavior is mitigated by originators' reputation efforts, by increasing transparency in the ABS market, as for example per the European Central Bank's loan-level initiative, and most effectively by their interaction.
{"title":"Better Be Careful: The Replenishment of ABS Backed by SME Loans","authors":"Arved Fenner, P. Klein, C. Mössinger","doi":"10.2139/ssrn.3751960","DOIUrl":"https://doi.org/10.2139/ssrn.3751960","url":null,"abstract":"We investigate the replenishment of 102 asset-backed securities (ABS) backed by more than 1.7 million small- and medium-sized enterprise loans. Based on our extensive data set from 2012 to 2017 obtained from the first and only central loan-level repository for ABS in Europe, we reveal that loans added to securitized loan portfolios after the transactions' closing perform worse than loans that are part of the initial portfolio. On average, we find that loans added to securitized loan portfolios demonstrate a 0.42 percentage points higher probability of default. We additionally provide evidence that originators induce these performance differences since they exploit their information advantage by deliberately adding low-quality loans to securitized loan portfolios. This adverse behavior is mitigated by originators' reputation efforts, by increasing transparency in the ABS market, as for example per the European Central Bank's loan-level initiative, and most effectively by their interaction.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128174175","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I estimate ex-ante crash probabilities for individual stocks via novel machine learning methodologies. In particular, I introduce imbalanced learning techniques to facilitate rare events prediction. I show that stocks with high crash probabilities tend to have lower returns. Further results indicate that at least a subset of retail investors, as proxied by Robinhood traders, tend to chase high crash risk stocks, which may bid up their prices and result in lower returns subsequently. Using Robinhood's introduction of commission-free option trading at the end of 2017 as a quasi-natural experiment, together with textual information from Reddit, I document causal evidence that retail participation significantly increases stock crash risk. This effect is stronger for small firms.
{"title":"Fat and Fatter: Crash Risk and Retail Trading","authors":"Qianyun Yang","doi":"10.2139/ssrn.3858180","DOIUrl":"https://doi.org/10.2139/ssrn.3858180","url":null,"abstract":"I estimate ex-ante crash probabilities for individual stocks via novel machine learning methodologies. In particular, I introduce imbalanced learning techniques to facilitate rare events prediction. I show that stocks with high crash probabilities tend to have lower returns. Further results indicate that at least a subset of retail investors, as proxied by Robinhood traders, tend to chase high crash risk stocks, which may bid up their prices and result in lower returns subsequently. Using Robinhood's introduction of commission-free option trading at the end of 2017 as a quasi-natural experiment, together with textual information from Reddit, I document causal evidence that retail participation significantly increases stock crash risk. This effect is stronger for small firms.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130093283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Miguel Faria e Castro, Pascal Paul, Juan M. Sánchez
We develop a simple model of relationship lending where lenders have incentives for evergreening loans by offering better terms to less productive and more indebted firms. We detect such lending behavior using loan-level supervisory data for the United States. Low-capitalized banks systematically distort firms’ risk assessments to window-dress their balance sheets. To avoid further reductions in their capital ratios, such banks extend relatively more credit to underreported borrowers. We incorporate the theoretical mechanism into a dynamic heterogeneous-firm model to show that evergreening affects aggregate outcomes, resulting in lower interest rates, higher levels of debt, and lower productivity.
{"title":"Evergreening","authors":"Miguel Faria e Castro, Pascal Paul, Juan M. Sánchez","doi":"10.20955/wp.2021.012","DOIUrl":"https://doi.org/10.20955/wp.2021.012","url":null,"abstract":"We develop a simple model of relationship lending where lenders have incentives for evergreening loans by offering better terms to less productive and more indebted firms. We detect such lending behavior using loan-level supervisory data for the United States. Low-capitalized banks systematically distort firms’ risk assessments to window-dress their balance sheets. To avoid further reductions in their capital ratios, such banks extend relatively more credit to underreported borrowers. We incorporate the theoretical mechanism into a dynamic heterogeneous-firm model to show that evergreening affects aggregate outcomes, resulting in lower interest rates, higher levels of debt, and lower productivity.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117199411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a theoretical framework to reconcile episodes of V-shaped and L-shaped recovery, encompassing the behaviour of the U.S. economy before and after the Great Recession. In a DSGE model with endogenous growth, negative demand shocks destroy productive capacity, moving GDP to a lower trajectory. A Taylor rule policy designed to reduce the output gap may counterbalance the shocks, preventing the destruction of economic capacity and inducing a V-shaped recovery. However, when shocks are deep and persistent enough, like during the Great Recession, they call for a downward revision of potential output measures, the so-called switching-track, weakening the recovering role of monetary policy and inducing an L-shaped recovery. When calibrated to the U.S. economy, the model replicates well the L-shaped recovery and switching-track that followed the Great Recession, as well as the V-shaped recoveries that followed the oil shock recessions. JEL Classification: E12, E22, E32, O41, E52
{"title":"Switching-track after the Great Recession","authors":"Francesca Vinci, Omar Licandro","doi":"10.2139/ssrn.3862241","DOIUrl":"https://doi.org/10.2139/ssrn.3862241","url":null,"abstract":"We propose a theoretical framework to reconcile episodes of V-shaped and L-shaped recovery, encompassing the behaviour of the U.S. economy before and after the Great Recession. In a DSGE model with endogenous growth, negative demand shocks destroy productive capacity, moving GDP to a lower trajectory. A Taylor rule policy designed to reduce the output gap may counterbalance the shocks, preventing the destruction of economic capacity and inducing a V-shaped recovery. However, when shocks are deep and persistent enough, like during the Great Recession, they call for a downward revision of potential output measures, the so-called switching-track, weakening the recovering role of monetary policy and inducing an L-shaped recovery. When calibrated to the U.S. economy, the model replicates well the L-shaped recovery and switching-track that followed the Great Recession, as well as the V-shaped recoveries that followed the oil shock recessions. JEL Classification: E12, E22, E32, O41, E52","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120996774","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates mutual funds’ potential “greenwashing” behavior. Funds profiled as ESG- based receive higher inflows compared to other similar funds. Importantly, we show this is true also for ESG labeled funds having inferior objective ESG profiles, as based on Morningstar sustainability ratings, applying to both retail and institutional funds. An analysis of mutual funds repurposing into ESG focus shows that fund families especially tend to convert such funds whose ability to attract in-flows has been lagging behind. Documenting and uncovering the motives for greenwashing is vital in terms of trust in the emerging and rapidly growing market of green financial products, with high hopes for its pivotal role in combating climate change.
{"title":"Greenwashing in Mutual Funds","authors":"Markku Kaustia, Wenjia Yu","doi":"10.2139/ssrn.3934004","DOIUrl":"https://doi.org/10.2139/ssrn.3934004","url":null,"abstract":"This paper investigates mutual funds’ potential “greenwashing” behavior. Funds profiled as ESG- based receive higher inflows compared to other similar funds. Importantly, we show this is true also for ESG labeled funds having inferior objective ESG profiles, as based on Morningstar sustainability ratings, applying to both retail and institutional funds. An analysis of mutual funds repurposing into ESG focus shows that fund families especially tend to convert such funds whose ability to attract in-flows has been lagging behind. Documenting and uncovering the motives for greenwashing is vital in terms of trust in the emerging and rapidly growing market of green financial products, with high hopes for its pivotal role in combating climate change.","PeriodicalId":284021,"journal":{"name":"International Political Economy: Investment & Finance eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121410075","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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