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Article
Publication date: 26 September 2023

Manuel Lobato, Javier Rodríguez and Herminio Romero-Perez

This study aims to examine the herding behavior of socially responsible exchange traded funds (SR ETFs) in comparison to conventional ETFs during the COVID-19 pandemic.

Abstract

Purpose

This study aims to examine the herding behavior of socially responsible exchange traded funds (SR ETFs) in comparison to conventional ETFs during the COVID-19 pandemic.

Design/methodology/approach

To test for herding behavior, the authors use the cross-sectional absolute deviation and a quadratic market model.

Findings

During the pandemic, investments in socially responsible financial products grew rapidly. And investors in the popular SR ETFs herd during this special period, while holders of conventional ETFs did not.

Practical implications

Investors in socially responsible investments must do their own research and make their own financial decisions, rather than follow the crowd, especially during extreme events like the COVID-19 pandemic.

Originality/value

The evidence shows that, during the pandemic, socially responsible ETFs behaved in line with theoretical predictions of herding, that is, herding is more significant during extreme market conditions.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 20 December 2022

Andrea Delle Foglie and J.S. Keshminder

The main objective of this paper is to analyze works of literature on SRI sukuk to highlight the potential for these kinds of instruments in financing more sustainable financial…

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Abstract

Purpose

The main objective of this paper is to analyze works of literature on SRI sukuk to highlight the potential for these kinds of instruments in financing more sustainable financial systems (SFSs). The analysis mainly accentuates a dearth of knowledge on the various challenges and opportunities in the realm of SRI.

Design/methodology/approach

This paper pioneers the bibliometric and systematic literature review of the development of the SRI sukuk from 2016 (the first available year in the field) to and 2021.

Findings

The study findings highlighted several pertinent SRI issues: the lack of standardization due to the different interpretations of Shariah and green, the lack of retail investors, which inevitably produce a lack of liquidity in the secondary market, thus limiting their growth, its funding allocation’ close resemblance to green financing, and the role of Malaysia and Indonesia as global sustainable financial hubs to stimulate the development of Shariah-compliant sustainable instruments and contribute to the international debate about the building of a global standardized framework related to sustainable investments.

Originality/value

The integration of the environmental principles of a green bond with the Shariah-compliant financial structure of a sukuk, the SRI sukuk, represents a vital crossroad in both sustainable and Islamic finance. Social-impact sukuk and green sukuk is an undervalued instrument that could play an important role in financing a more sustainable economic and financial system, including Islamic investing. This kind of instruments, which is based on a “pay for success” principle in the conventional layout, perfectly fit with the profit-and-lost sharing’s (PLS's) ethicality, the sustainability principles of Islamic finance and the religious principles of Islamic law.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 21 February 2024

Katia Lobre-Lebraty and Marco Heimann

We explore how sustainable management education (SME) can help prepare future leaders to manage crises effectively. Precisely, the intricacies of articulating moral and economic…

Abstract

Purpose

We explore how sustainable management education (SME) can help prepare future leaders to manage crises effectively. Precisely, the intricacies of articulating moral and economic imperatives for businesses in a manner that engages students in sustainable behavior are a serious challenge for SME. We study how to integrate reminders of moral and economic imperatives in a socially responsible investment (SRI) stock-picking simulation created for SME.

Design/methodology/approach

Adopting an experimental design, we analyzed how the reminders affected the average environment social governance (ESG) integration in the portfolios of 127 graduate students in finance over a twelve-week period.

Findings

Our results show how essential it is to balance the two imperatives. The highest level of sustainable investment is attained when utilizing both reminders.

Practical implications

Our findings have practical implications for implementing and organizing SME in business schools to educate responsible leaders who are able to effectively manage crises. Learning responsible management is most effective when students are exposed to the inherent tension between moral and economic imperatives. Hence, our findings corroborate the win-win conception of SME.

Originality/value

No management decision study has experimentally measured the effects of SME practices on students' actual behavior. Our research fills this gap by complementing previous studies on the effectiveness of teaching practices, first by drawing on behavioral sciences and measuring changes in students' actual sustainability behavior and second by introducing moral and economic imperatives into an innovative teaching resource (TR) dedicated to SME.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 20 September 2023

Yosuke Kakinuma

While an increasing number of investors value socially responsible investment practices, Bitcoin has faced criticism for its carbon footprint resulting from excessive mining power…

Abstract

Purpose

While an increasing number of investors value socially responsible investment practices, Bitcoin has faced criticism for its carbon footprint resulting from excessive mining power consumption. By examining Bitcoin’s interconnectedness with environmental, social and governance (ESG) equities, this study aims to construct a socially responsible investment strategy for cypto investors.

Design/methodology/approach

This study uses wavelet analysis and a time-varying parameter vector autoregressive (TVP-VAR) model to uncover the interdependence between ESG equities and Bitcoin. This study computes the optimal ratio, showing that Bitcoin significantly reduces portfolio risk when combined with green stocks.

Findings

The results show that co-movements between green stocks and Bitcoin are low, indicating that they are suitable combinations for portfolio diversification. From an environmental perspective, this investment strategy offers a theoretical solution to mitigate the negative impacts associated with Bitcoin mining. It aims to address the dilemma faced by sustainability-conscious investors, who must navigate the economic payoff of Bitcoin against their commitment to green investment principles.

Practical implications

The findings can provide valuable insights for policymakers seeking to develop strategies that promote sustainable investments among crypto investors.

Originality/value

Research on ethical investment practices in the cryptocurrency market remains in the early stages of development. Ethical investors can benefit from including Bitcoin in their ESG equity portfolios.

Details

International Journal of Ethics and Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2514-9369

Keywords

Article
Publication date: 3 January 2024

Kirti Sood, Prachi Pathak and Sanjay Gupta

Investment decisions hold immense significance for investors and eventually affect their portfolio performance. Investors are advised to weigh the costs and benefits associated…

Abstract

Purpose

Investment decisions hold immense significance for investors and eventually affect their portfolio performance. Investors are advised to weigh the costs and benefits associated with every decision in order to make rational investment decisions. However, behavioral finance research reveals that investors' choices often stem from a blend of economic, psychological and sociological factors, leading to irrationality. Moreover, environmental, social and corporate governance (ESG) factors, aligned with behavioral finance hypotheses, also sway opinions and stock prices. Hence, this study aims to identify how individual equity investors prioritize key determinants of investment decisions in the Indian stock market.

Design/methodology/approach

The current research gathered data from 391 individual equity investors through a structured questionnaire. Thereafter, a fuzzy analytic hierarchy process (F-AHP) was used to meet the purpose of the research.

Findings

Information availability, representative heuristics belonging to psychological factors and macroeconomic indicators falling under economic factors were discovered to be the three most prioritized criteria, whereas environmental issues within the realm of ESG factors, recommendations of brokers or investment consultants of sociological factors, and social issues belonging to ESG factors were found to be the least prioritized criteria, respectively.

Research limitations/implications

Only active and experienced individual equity investors were surveyed in this study. Furthermore, with a sample size of 391 participants, the study was confined to individual equity investors in one nation, India.

Practical implications

This research has implications for individual investors, institutional investors, market regulators, corporations, financial advisors, portfolio managers, policymakers and society as a whole.

Originality/value

To the best of the authors' knowledge, no real attempt has been made to comprehend how active and experienced individual investors prioritize critical determinants of investment decisions by taking economic, psychological, sociological and ESG factors collectively under consideration.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 22 March 2024

Rachana Jaiswal, Shashank Gupta and Aviral Kumar Tiwari

Grounded in the stakeholder theory and signaling theory, this study aims to broaden the research agenda on environmental, social and governance (ESG) investing by uncovering…

Abstract

Purpose

Grounded in the stakeholder theory and signaling theory, this study aims to broaden the research agenda on environmental, social and governance (ESG) investing by uncovering public sentiments and key themes using Twitter data spanning from 2009 to 2022.

Design/methodology/approach

Using various machine learning models for text tonality analysis and topic modeling, this research scrutinizes 1,842,985 Twitter texts to extract prevalent ESG investing trends and gauge their sentiment.

Findings

Gibbs Sampling Dirichlet Multinomial Mixture emerges as the optimal topic modeling method, unveiling significant topics such as “Physical risk of climate change,” “Employee Health, Safety and well-being” and “Water management and Scarcity.” RoBERTa, an attention-based model, outperforms other machine learning models in sentiment analysis, revealing a predominantly positive shift in public sentiment toward ESG investing over the past five years.

Research limitations/implications

This study establishes a framework for sentiment analysis and topic modeling on alternative data, offering a foundation for future research. Prospective studies can enhance insights by incorporating data from additional social media platforms like LinkedIn and Facebook.

Practical implications

Leveraging unstructured data on ESG from platforms like Twitter provides a novel avenue to capture company-related information, supplementing traditional self-reported sustainability disclosures. This approach opens new possibilities for understanding a company’s ESG standing.

Social implications

By shedding light on public perceptions of ESG investing, this research uncovers influential factors that often elude traditional corporate reporting. The findings empower both investors and the general public, aiding managers in refining ESG and management strategies.

Originality/value

This study marks a groundbreaking contribution to scholarly exploration, to the best of the authors’ knowledge, by being the first to analyze unstructured Twitter data in the context of ESG investing, offering unique insights and advancing the understanding of this emerging field.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 8 March 2024

Said Elfakhani

This study aims to test mutual fund superiority, comparing the performance of 646 Islamic mutual funds with 475 ethical funds and conventional proxies.

Abstract

Purpose

This study aims to test mutual fund superiority, comparing the performance of 646 Islamic mutual funds with 475 ethical funds and conventional proxies.

Design/methodology/approach

This study uses statistical methods including paired t-statistics of independent samples, one-way Bonferroni test–analysis of variance–F-statistic for testing means equality, the chi-squared test for median equality and regression models corrected for heteroscedasticity. These methods are used to identify superiority of mutual funds and to validate the significance of the results.

Findings

The findings confirm the superiority of conventional funds over ethical funds and ethical funds over Islamic funds. Both ethical and Islamic funds, however, outperform conventional proxies during some recessionary periods. Moreover, stronger performance is recorded for Islamic funds in Europe and North America regions and across age and asset allocation categories, but limited support for reversal fund size, composition focus and reversed price effect.

Research limitations/implications

These findings should assist investors when deciding to invest and motivate Islamic and ethical funds to improve their portfolio formation and asset allocation strategies set by their professional managers.

Originality/value

The originality of this study is in its comprehensive approach in that it compares the performance of funds after accounting for such characteristics as fund objectives, size, age, asset allocation, geographical investment focus, fund composition focus, share price levels and the effect of global crises. This study approach is not only original and productive in documenting Islamic funds’ performance for the past three decades (1990–2022) but can also update the literature on these characteristics collectively and individually.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 26 December 2023

Syed Marwan, Suhaiza Ismail, Engku Rabiah Adawiah Engku Ali and Mohamed Aslam Mohamed Haneef

The purpose of the paper is twofold. Firstly, this study aims to investigate the factors influencing stakeholders’ intention to invest in Shariah-compliant social impact bonds (SC…

Abstract

Purpose

The purpose of the paper is twofold. Firstly, this study aims to investigate the factors influencing stakeholders’ intention to invest in Shariah-compliant social impact bonds (SC SIBs) in Malaysia. Secondly, this study compares the differences in the perception of different stakeholders on the importance of the factors.

Design/methodology/approach

Using the extended theory of planned behaviour, the study undertakes a questionnaire survey on licensed capital market investors and individuals involved in the development of the financial market (developers). A total of 260 complete and valid responses were obtained from the survey. Multiple regression and Mann–Whitney tests were carried out to achieve the two objectives, respectively.

Findings

The results reveal that attitude (β = 0.447, p < 0.01), subjective norm (SN) (β = 0.255, p < 0.01) and moral norm (MN) (β = 0.163, p < 0.01) are significantly positive predictors of intention to invest in SC SIBs. In terms of the differences in the perceptions of the two parties, the results show that the factors have more effect towards developers than investors.

Originality/value

The empirical evidence from this study on the factors that influence stakeholders’ participation in SC SIBs is useful to the policymakers and interested parties in taking the next steps to develop, implement and promote SC SIBs to stakeholders in Malaysia. Fund managers can use the study’s insights to promote positive attitudes, SNs and MNs towards SC SIBs, especially targeting developers who are more influenced by these factors. More importantly, the results indicate a need for different strategies to influence the stakeholder investment behaviour of SC SIB in Malaysia to ensure that it is sustainable and viable in the long run.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 15 December 2023

Umar Nawaz Kayani

This study aims to give a glimpse of the existing blockchain applications across industries and add to a complete knowledge of the blockchain’s properties.

Abstract

Purpose

This study aims to give a glimpse of the existing blockchain applications across industries and add to a complete knowledge of the blockchain’s properties.

Design/methodology/approach

Systematic literature review is used as the research strategy for this investigation and other aspects of the preferred reporting items for systematic reviews and meta-analyses framework have been incorporated to create a scholarly publications evaluation of the blockchain-based application in the financial arena and its future. The research looks at 86 studies published between 2018 and 2022.

Findings

There has been a steady but noticeable increase in the study of blockchain’s potential in many application domains over the past few of years. This rising tendency illustrates the newness and potential of blockchain technology, as well as the increasing attention from academics. According to the findings, blockchain is an appropriate solution for processing transactions using cryptocurrencies; nevertheless, it still has significant technical issues and limits that require to be exploring and solving before it can be considered a viable option. It is therefore, necessary to have a high level of reliability for payments and confidentiality, in addition to maintaining the anonymity of nodes, to stop assaults and efforts to disrupt transactions in the blockchain.

Practical implications

This study has several important theoretical and practical implications. First, it adds to the body of knowledge on blockchain and Fintech, focusing on the transaction side. While much blockchain research has focused on how the technology may affect strategic choices, this study has shed light on its potential from the perspective of financial reporting. Second, by highlighting the importance of the demand for the prompt identification of losses, this work adds to the body of knowledge on the factors that influence transaction frauds involving paper money. Additionally, by establishing the link between transparency and virtual transactions, the author backs up the asymmetric responses of investors to different investment possibilities. It looks at the evolution of financial technology (Fintech) and shows how it can be used to take the advantage of unique opportunities.

Originality/value

The study is different and novel from the previously published literature on this topic mainly because of its comprehensiveness, as it revolves around all industrial and commercial areas. The three main lines of research have been outlined, namely, classifying the many blockchain-based innovations that will alter the financial landscape in many industries; identifying whether these industries are a good fit for blockchain’s wealth creation potential; and directing researchers by outlining prospective study pathways.

Details

Journal of Science and Technology Policy Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4620

Keywords

Article
Publication date: 30 November 2023

Bilal Mukhtar, Muhammad Kashif Shad, Fong-Woon Lai and Ahmad Waqas

The purpose of this study is to examine the influence of ESG practices on green innovation with the moderating effect of innovation orientation in Malaysian manufacturing listed…

Abstract

Purpose

The purpose of this study is to examine the influence of ESG practices on green innovation with the moderating effect of innovation orientation in Malaysian manufacturing listed companies.

Design/methodology/approach

This study employed a quantitative research approach by using a well-structured questionnaire for data collection. The questionnaire was distributed to 204 Malaysian manufacturing listed companies in consumer products and services sector. Finally, partial least square-structural equation modeling (PLS-SEM) was utilized to examine the relationship between constructs.

Findings

Based on stakeholder theory, results indicated that environmental, social and governance (ESG) practices significantly improve green innovation. The insignificant moderating effect of innovation orientation was identified between the relationship of environmental and social practices and green innovation. Interestingly, results affirmed the negative moderating effect between the relationship of governance practices and green innovation.

Research limitations/implications

This study is limited to Malaysian manufacturing companies of consumer products and services sector in Bursa Malaysia. Hence, the findings of this study cannot be generalized to manufacturing companies of other geographical contexts.

Practical implications

This work provides constructive implications to management and policymakers of Malaysian manufacturing companies in strategic planning toward enhancing green innovation and developing business competitiveness to achieve sustainable business performance.

Originality/value

This research magnifies valuable insights into the literature through a comprehensive model that simultaneously investigates the relationships between ESG practices, innovation orientation and green innovation. In addition, this is the first attempt to investigate the influence of ESG practices on green innovation with a moderating effect of innovation orientation, which indeed strengthens the originality of this study.

Details

Management & Sustainability: An Arab Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2752-9819

Keywords

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