The Market Performance of Socially Responsible Investment during Periods of the Economic Cycle – Illustrated Using the Case of FTSE. (16th November 2015)

• Record Type: Journal Article
• Authors: Wu, Junjie; Lodorfos, George; Dean, Aftab; Gioulmpaxiotis, Georgios
• Is Part Of: Managerial and decision economics. Volume 38:Number 2(2017)
• Page Start: 238
• Page End: 251
• Publication Date: 2015-11-16
• Subjects: Managerial economics -- Periodicals; Decision making -- Periodicals; Management -- Periodicals; 658.15
• DOI: 10.1002/mde.2772
• Languages: English
• ISSNs: 0143-6570

Abstract

Abstract : The debate about socially responsible investment (SRI) portfolio performance compared with its non‐SRI counterparts remains inconclusive. This paper contributes to the debate by adding a new approach, examining the issue of a full economic circle through economic boom, recession and recovery. We compare stock performance of two value‐weighted investment portfolios: FTSE4Good (SRI portfolios) and FTSE 350 (conventional portfolios) from 2004 to 2011 including 2007 to 2009 financial crash. The results indicate the SRI portfolio performed better and recovered its value quicker in post‐crisis than the non‐SRI portfolio, indicating that SRI portfolios are more resilient to economic turmoil and market shocks. Copyright © 2015 John Wiley & Sons, Ltd.