search query: @indexterm liquidity / total: 315
reference: 3 / 315
| Author: | Cox, P. Wicks, P.G. |
| Title: | Institutional interest in corporate responsibility: portfolio evidence and ethical explanation |
| Journal: | Journal of Business Ethics
2011 : SEP, VOL. 103:1, p. 142-165 |
| Index terms: | social responsibility investments liquidity business ethics United Kingdom risk analysis stock ownership decision making shareholders financial services |
| Language: | eng |
| Abstract: | This article investigates the magnitude of corporate responsibility's influence on the demand for shares by institutions. The study follows Bushee (Account Rev 73(3):305-333, 1998) in classifying institutions as dedicated or transient. The demand for shares is organised determined by three factors: a long-term one, corporate responsibility; a short-term one, market liquidity; and a time-independent one, portfolio theory. The rank and importance of the factors for the different institutional investor types are analysed. For one of two types of dedicated institution, corporate responsibility is similarly important as portfolio theory in affecting the demand for shares. For all dedicated institutions, corporate responsibility affects the demand for shares more than market liquidity. For two of the three transient institution types, market liquidity plays the greatest role in share selection. For all transient institutions, the least important factor is corporate responsibility. Findings imply that corporate responsibility significantly increases the demand for shares by dedicated institutions. We discuss the extent to which these trends are constitutive of significant shifts in ethicality within institutional investment. From the perspective of a highly institutionalised Anglo market model, dedicated institutions' commitment to broader, longer-term issues could be interpreted as a small but significant shift towards a more axiologically informed ethical business practice. Such an engagement form calls for sensitive attention to a fuller range of deemed-to-be relevant features to investment decisions, instead of narrower reliance on legislation, codes of practice and fiduciary principles. |
SCIMA