The value of saints and the price of sin

Sze Kee Koh, Robert B Durand, Manapon Limkriangkrai

    Research output: Contribution to journalArticleResearchpeer-review

    4 Citations (Scopus)

    Abstract

    Using firms in the MSCI KLD 400 as exemplars of virtuous firms (the Saints ), and firms in the Triumvirate of Sin - alcohol, tobacco and gaming - we utilize a modification of the Feltham and Ohlson (1995) valuation model and quantile regressions to estimate Saint premiums and Sinner discounts . For firms followed by sell-side analysts, the Saint premium is, on average, 5.77 (a 19.2 premium over the share price) and the Sinner discount is, on average, 3.91 (a discount of 32.1 of the share price). The evidence supports the notion that CSR creates shareholder value. Practices contrary to social norms destroy value.
    Original languageEnglish
    Pages (from-to)56 - 72
    Number of pages17
    JournalPacific Basin Finance Journal
    Volume35
    DOIs
    Publication statusPublished - 2015

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