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The purpose of this study is to show how socially responsible investment (SRI) could represent a powerful tool (trust recovering in political and economic institutions) in the case of failure or stagnation of economic and financial growth. The purpose of this chapter is to evaluate the current status of SRI in the context of the recent financial and economic crises. The main objective of this analysis is to consider the different benefits and challenges that this type of investment transactions bring into the international economy, and how SRI entrance could represent a major benefit not only for investors a different approach to corporate sustainability but as an important possibility in times of global economic and political crisis.

By analysing the literature about SRI, it has been developed a discussion regarding its benefits and obstacles in today’s financial scenario. By evaluating the performance of SRI in the context of the global financial crisis and the important opportunities regarding development, we would like to present the SRI as an important tool in today’s Post 2015 development agenda.

After revising the existent literature, it has been found that there are two important discussions in the field of SRI. The first one is related with the financial performance of SRI in contrast with the conventional investment funds while the second one is related with important considerations about the SRI in the context of the global financial crisis. After considering the arguments from the different authors, we address some conclusions regarding the importance of SRI in nowadays sustainable development discussion.

Due to failure in the traditional modus operandi of financial institutions and the recent global crises, investors, corporate executives and governments are increasingly paying more attention on the social, environmental and ethical behaviour of individual managers, shareholders and institutional investors. Therefore, it is being observed a shift and maturing process in SRI from an exclusive practice of few and specialised niche investment funds with minor financial implications and limited economic importance, to mainstream adopted by a growing number of institutional investors at the international level. This shift may influence companies and managers to adopt universal values and to assume a committed and strategic CSR agenda to respond to markets and societal expectations, in order to have guilt-free and sustainable investment and sustainable financial markets.

Within the context of the Post 2015 development agenda, the role of business and the private sector has become crucial for funding the new sustainable development goals (SDGs). This chapter not only discussed the relationship between SRI as an alternative to overcome financial crises and lack of sustainability in investment, but it does also conceptually demonstrates the potential of SRI to achieve the funding of the SDGs.

The 2008/2009 World Financial Crisis underlined the importance of social responsibility for the sustainable functioning of economic markets. Heralding an age of novel heterodox economic thinking, the call for integrating social facets into mainstream economic models has reached unprecedented momentum. Financial Social Responsibility bridges the finance world with society in socially conscientious investments. Socially Responsible Investment (SRI) integrates corporate social responsibility in investment choices. In the aftermath of the 2008/2009 World Financial Crisis, SRI is an idea whose time has come. Socially conscientious asset allocation styles add to expected yield and volatility of securities social, environmental, and institutional considerations. In screenings, shareholder advocacy, community investing, social venture capital funding and political divestiture, socially conscientious investors hone their interest to align financial profit maximization strategies with social concerns. In a long history of classic finance theory having blacked out moral and ethical considerations of investment decision making, our knowledge of socio-economic motives for SRI is limited. Apart from economic profitability calculus and strategic leadership advantages, this paper sheds light on socio-psychological motives underlying SRI. Altruism, need for innovation and entrepreneurial zest alongside utility derived from social status enhancement prospects and transparency may steer investors’ social conscientiousness. Self-enhancement and social expression of future-oriented SRI options may supplement profit maximization goals. Theoretically introducing potential SRI motives serves as a first step toward an empirical validation of Financial Social Responsibility to improve the interplay of financial markets and the real economy. The pursuit of crisis-robust and sustainable financial markets through strengthened Financial Social Responsibility targets at creating lasting societal value for this generation and the following.

Purpose: In reality, financial decisions are made under conditions of asymmetric information that results in either favorable or adverse selection. As far as financial decisions affect growth of the firm, the latter must also be affected by either favorable or adverse selection. Therefore, the core objective of this chapter is to examine the determinants of each financial decision and the effects on growth of the firm under conditions of information asymmetry.

Design/Methodology/Approach: This chapter uses data for the non-financial firms listed in S&P 500. The data cover quarterly periods from 1989 to 2014. The statistical tests include linearity, fixed, and random effects and normality. The generalized method of moments estimation method is employed in order to examine the relative significance and contribution of each financial decision on growth of the firm, respectively. Standard and proposed proxies of information asymmetry are discussed.

Findings: The results conclude that there is a variation in the impact of financial variables on growth of the firm at high and low levels of information asymmetry especially regarding investment and financing decisions. A similar picture emerges in the cases of firm size and industry effects. In addition, corporate dividen d policy has a similar effect on firm growth across all asymmetric levels. These findings prove that information asymmetry plays a vital role in the relationship between corporate financial decisions and growth of the firm. Finally, the results contribute to the vast literature on the estimation of information asymmetry by demonstrating that the classical and standard proxies for information asymmetry are not consistent in terms of the ability to differentiate between favorable or adverse selection (which corresponds to low and high level of information asymmetry).

Originality/Value: This chapter contributes to the related literature in two ways. First, this chapter offers updated empirical evidence on the way that financing, investment, and dividends decisions are made under conditions of favorable and adverse selection. Other related studies deal with each decision separately. Second, the study offers new proxies for measuring information asymmetry in order to reach robust estimates of the effects of financial decisions on growth of the firm under conditions of agency problems.

Purpose – Examine the role of institutional investors in accelerating the development of capital markets and economies abroad, the determinants of their investment, both in the domestic and foreign markets, and their importance in promoting good corporate governance practices worldwide and facilitating increased financial integration.

Methodology/approach – Review and synthesize recent academic literature (1970–2011) on the process of international financial integration and the role of foreign institutional investors in the increasingly global financial markets.

Findings – Despite the concern that short-term flow of international capital can be destructive to the emerging and developing market economies, academic evidence on a destabilizing effect of foreign investment activity is limited. Institutional investors’ systematic preference for stocks of large, well-known, globally visible foreign firms can explain the presence of a home bias in international portfolio investment.

Research limitations – Given the breadth of the two literature streams, only representative studies (over 45 published works) are summarized.

Social implications – Regulators of emerging markets should first improve domestic institutions, governance, and macroeconomic fundamentals, and then deregulate domestic financial and capital markets to avoid economic and financial crises in the initial stages of liberalization reforms.

Originality/value of paper – A useful source of information for graduate students, academics, and practitioners on the importance of foreign institutional investors.

Over the last several decades, the question of the import of firms’ social and environmental responsibilities has taken center stage. While once companies’ obligations to stakeholders and to sustainability were framed as normative issues, these criteria are taking on instrumental worth. Most recently, advocates of Responsible Investment have suggested that firms’ environmental, social, and governance (ESG) performance possesses critical implications for companies’ creation and capture of long-term economic value. Employing textual analysis, this chapter analyzes the accounting, rating, and reporting standards that have been developed by which companies are expected to measure, communicate, and be evaluated for their ESG performance. Drawing from literature on organizational imprinting, this chapter finds significant differences across these standards, in terms of the determination of materiality and firms’ desired stakeholder relations. The divergence present in the meaning and measure of Responsible Investment across these standards possesses important strategic implications for managers in this field who must consider the implications of each guideline for internal and external purposes.

Purpose – Responsible investor (RI) engagement seeks to change corporate strategic priorities while balancing the financial imperative. This chapter uses an institutional theory framework to explore the tension between financial performance and environmental, social, and governance (ESG) issues in RI engagement.

Methodology – Discourse of the proponent, supporters and opponents of Australia’s first climate change shareholder resolution – a minority proposal, will be analyzed using framing analysis.

Findings – Framing indicated that the discourse emphasized the dominant financial performance logic while often omitting the ESG logic. One possible explanation is that the process of shareholder proposal nomination and the financial imperative of investment organizations effectively co-opted the engagement.

Research limitations – A case of responsible investment engagement is used to illustrate multiple logics in the investment field. Although there are significant limitations to drawing inferences from a single example, the discussion is relevant to RI support for engagement initiatives such as the UN Principles of Responsible Investment clearinghouse and Carbon Disclosure Project Carbon Action. This chapter argues that attempts to change corporate strategic actions on climate change by RI through engagement will be less effective while the financial performance logic provides relatively more legitimacy to investors.

Practical implications – Integrating the ESG logic with the financial logic is vulnerable to co-optation due to incommensurability. Operationalizing both logics requires establishing a boundary between ESG and financial logics to develop legitimacy.

Social implications – RI engagement on climate change has the potential to be an important part of the social response to the sustainability agenda.

Originality – In applying institutional theory to RI climate change activism this chapter presents original insights into the potential of engagement to effect change.

After its adhesion to the EU in 1986 Portuguese agriculture benefitted from a continuous flow of European funds aimed at the modernization of the sector in order that it might face the shock of competition with more developed agricultures.

However, enough evidence exists to show that the crowding out of Portuguese capitals was counterproductive to the political objectives. In fact, despite the EU transfers, in only two of the years from 1980 to 2009 did agricultural investment attain identical levels to those prior to integration.

If one considers investment as being the best indicator to explain the poor results of Portuguese agriculture over the last three decades, my argument is that this evolution needs a retrospective analysis focusing on the concept of financialization of the economy induced by EU and national policies. Therefore, this chapter is an explanatory attempt to open a broad discussion on the role of financialization in agriculture and rural development issues.