Do investors actually value sustainability? New evidence from investor reactions to the Dow Jones Sustainability Index (DJSI)

Research Summary: Research exploring investor reactions to sustainability has substantial empirical limitations, which we address with a large‐scale longitudinal financial event study of the first global sustainability index, DJSI World. We examine investor reactions to firms from 27 countries over 17 years that are added, deleted, or continue on the index. We find that once relevant controls and comparisons to observationally equivalent firms beyond the index are included, DJSI events have only limited significance and/or materiality. Nonetheless, investors' valuation of sustainability around the world has evolved over time, involving diminishing reactions to U.S. firms and increasing benefits, particularly of continuation on the index, over time. The study highlights the importance of careful analysis and longitudinal global samples in making inferences about the financial effects of social performance. Managerial Summary: The debate about how investors perceive corporate social responsibility (CSR) predates Milton Friedman's famous statement that the only social responsibility of business is to increase profits. Although extensive research has studied whether sustainability contributes to financial performance, we have yet to understand whether investors believe it pays off. This financial event study of reactions to the addition, continuation, and deletion from DJSI World, the first global sustainability index, shows that investors care little about DJSI announcements. Nonetheless, there is some evidence that global assessments of sustainability are converging and that investors may increasingly be valuing continuation on the DJSI, suggesting that firms may gain at least limited benefits from reliable sustainability activities.     

美国地方政府创新的影响因素分析

本文研究了促进或妨碍地方政府管理创新的各项因素。研究结果表明,领导公信力既对地方政府创新的发起和实施起到了重要的作用,也是决定具体政府改革成败的重要因素;议会冲突对地方政府改革的成败不起关键作用;议会—行政机关关系的融洽有利于地方政府创新的成功开展。     

Experimental Methods for the General Economist: Five Lessons from the Lab

I review five primary results from experimental economics that impact the economics profession as a whole. These results regard the relative (un)importance of subject sophistication in laboratory markets, the importance of gender on economic outcomes, the propensity for humans to behave in less than fully rational ways, the importance of trading institutions on economic performance, and the behavioral relevance of economic theory. I find that economics as a profession has benefited from the use of experimental methods by fostering a dialogue between theorists and empiricists, better informing policy and improving data collection techniques.     

Localization and Customer Retention for Franchise Service Systems

This is one of the first studies to explore customer retention in reference to the franchisee–customer relationship. A subsequent objective was to examine localization and standardization from a franchise unit and system-level perspective. Data was collected using a self-administered survey based on customers of pet grooming services in Australia. Findings suggest that the addition of a customer retention perspective reveals a greater depth to the franchisee–customer relationship. Importantly, this implies that there are additional factors likely to influence franchisee–customer retention within franchise outlets. We suggest that individual franchise units, in cooperation with local customers, should co-create local marketing initiatives.     

Tourism and regional development a genetic approach

Research on tourism and regional development should include a temporal perspective, for studies of contemporary and economic impact are, by themselves, insufficient to explain tourism's contribution to regional development. Such a genetic approach is used to examine the growth and impact of tourism in Queenstown, New Zealand. Events and interrelationships are examined over the last twenty-five years to show the process of growth, changes in the patterns of local and outside involvement and the increasing sophistication of a resort once based largely on scenic factors alone. Certain sectors of the industry have been developed primarily by individuals and companies from the local region, while others have been dominated by outsiders. Although the former contribute the most to regional development through local participation in the development process, external developments have also generated complementary growth. A consideration of events over a certain time span allows these different factors to be placed more clearly in the context of regional development.     

CBO’s Outlook for the Economy in February 2014

These remarks summarize the economic forecast and budget outlook that the Congressional Budget Office (CBO) published in February 2014. The discussion has not been updated to reflect subsequent economic and budget data or subsequent projections by CBO. Under an assumption that current laws governing federal taxes and spending remain in place, CBO projects that real GDP will expand by roughly 3 percent between the fourth quarter of 2013 and the fourth quarter of 2014—the largest rise in nearly a decade. Similar annual growth rates are projected through 2017. Nevertheless, CBO estimates that the economy will continue to have considerable slack for the next few years. To a large degree, the slow recovery of the labor market since the official end of the recession in 2009 reflects slow growth in the demand for goods and services. To a smaller degree, that slow recovery is the result of structural factors that stem from the recession and the subsequent weak growth of output but that are not directly related to the economy’s current cyclical weakness. The unemployment rate is expected to remain above 6.0 percent until late 2016. Moreover, labor force participation is projected to move only slowly back toward what it would be without the cyclical weakness in the economy. Beyond 2017, CBO expects that economic growth will be well below the average seen over the past several decades, primarily because of slower growth in the labor force arising from the aging of the population. Inflation, as measured by the change in the price index for personal consumption expenditures, is expected to remain at or below 2.0 percent throughout the next decade. Interest rates on Treasury securities are projected to increase in the next few years as the economy strengthens. The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. However, if current laws remain unchanged, the deficit will increase again after a few years because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly. Federal debt held by the public is expected to equal 74 percent of GDP at the end of this year and close to 80 percent a decade from now.     

An Integrative Approach to Tourism: Lessons from the Andes of Peru

This study compares the Andean communities of Taquile Island and Chiquian, Peru, which differ in their level of integration for their respective tourism sector. Integration was primarily defined by percentage of local people employed, type and degree of participation, decision-making power, and ownership in the local tourism sector. Principally social and economic aspects were measured and evaluated, recognising that considerable local support and participation in tourism decision making are linked to issues of ownership and control. It was found that higher levels of integration would lead to enhanced socioeconomic benefits for the community. A framework for community integration was developed that could help guide research, planning, development and evaluation of community-based tourism projects.     

A Law and Finance Analysis of Hedge Funds

This paper empirically analyzes the impact of hedge fund regulation on fund structure and performance. The data indicate restrictions on the location of key service providers and permissible distributions via wrappers are associated with lower fund alphas, lower average monthly returns, and higher fixed fees. Furthermore, restrictions on the location of key service providers are associated with lower manipulation-proof performance measures, while wrapper distributions are associated with lower performance fees. As well, the data show standard deviations of monthly returns are lower among jurisdictions with restrictions on the location of key service providers and higher minimum capitalization requirements.     

Intrapreneurial intentions versus entrepreneurial intentions: distinct constructs with different antecedents

We posit that entrepreneurship and intrapreneurship are distinct entrepreneurial behaviors that differ in terms of their salient outcomes for the individual. Since individuals are likely to differ in their attitudes to these salient outcomes, and in their entrepreneurial self-efficacy, we hypothesize that a different strength of intention for entrepreneurship versus intrapreneurship will be due to individual differences in self-efficacy and in their attitudes to the outcomes from entrepreneurial, as compared to intrapreneurial, behavior. We find that while self-efficacy is significantly related to both entrepreneurial and intrapreneurial intentions, attitudes to income, ownership, and autonomy relate only to entrepreneurial intentions, while attitude to risk relates only to intrapreneurial intentions.