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A Study of So  cially Responsible Firms’Short-Term versus Long-term Performance

Abstract
This ar  ti  cle re  ex  am  ines the “do  ing well while do  ing good” de  bate within the fi  nan  cialman age ment  lit era ture,  us ing  com pari sons  among  so cially  re spon si ble  mu tual  funds(SRMF), the NYSE Com  pos  ite In  dex, and a port  fo  lio made up of firms most val  ued bySRMF man  ag  ers (MostSRF). The per  form  ance of MostSRF did no bet  ter or no worse than the over  all mar  ket or SRMF in three to five year com  pari  sons. How  ever, re  sults from theten- year per form ance com pari son re fute ear lier stud ies and in di cate that the mar ket pricesso cial  re spon si bil ity  char ac ter is tics  in  the  long  run. Given MostSRF  out per formed  theother two in  di  ces in this time  line, a new para  digm for un  der  stand  ing the im  pact of SRI isre vealed. 

Key words: social responsibility; fi nan cial per form ance; port fo lio man age ment

Sev  eral gen  era  tions of fi  nance stu  dents have been edu  cated un  der the as  sump  tion that thepri  mary duty of a pub  lic organi  za  tion’s man  age  ment is to maxi  mize stock  holder wealth by in  creas  ing the value of its com  mon stock (Brigham, Gap  en  ski, & Ehr  hardt, 1999). 

 None  -the  less, an es  sen  tial ques  tion re  mains: “How do we bal  ance so  cial con  cerns against theneed to cre  ate value for our share  hold  ers?” (p. 3).This query in  creas  ingly be  came promi  nent fol  low  ing the 1962 chal  lenge by Mil  tonFried  man that “a cor  po  ra  tion’s so  cial re  spon  si  bil  ity is to make a profit” (Grif  fin & Ma  hon, 1997, p.5). How  ever, its per  va  sive ap  pli  ca  tion within so  ci  ety co  in  cided with the baby-  boomers’ coming-  of-  age, a gen  era  tional co  hort that some ana  lysts pre  dicted would al  lowtheir value sys  tems to in  flu  ence their in  vest  ment choices (Mar  tin, 1986). One out  come hasbeen the rise of “so  cially re  spon  si  ble in  vest  ing” or SRI, which in  creased by nearly 200per  cent in the late 1990s (Spencer, 2001) and now rep  re  sents 10 per  cent of all in  vest  mentdol  lars in the United States (Sauer, 1997). SRI’s main  stream ac  cep  tance was so  lidi  fied bythe ad  di  tion of the Do  mini So  cial Eq  uity Fund to 401 (k) plans of com  pa  nies such as Hew  -lett Packard, Ford, and The Gap, along with mu  nici  pali  ties in  clud  ing the city of New Yorkand the state of Mas  sa  chu  setts (Spencer, 20本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。