What motivates grandparents to their altruism? We review answers from evolutionary theory, sociology, and economics. Sometimes in direct conflict with each other, these accounts of grandparental investment exist side-by-side, with little or no theoretical integration. They all account for some of the data, and none account for all of it. We call for a more comprehensive theoretical framework of grandparental investment that addresses its proximate and ultimate causes, and its variability due to lineage, values, norms, institutions (...) (e.g., inheritance laws), and social welfare regimes. This framework needs to take into account that the demographic shift to low fecundity and mortality in economically developed countries has profoundly altered basic parameters of grandparental investment. We then turn to the possible impact of grandparental acts of altruism, and examine whether benefits of grandparental care in industrialized societies may manifest in terms of less tangible dimensions, such as the grandchildren's cognitive and verbal ability, mental health, and well-being. Although grandparents in industrialized societies continue to invest substantial amounts of time and money in their grandchildren, we find a paucity of studies investigating the influence that this investment has on grandchildren in low-risk family contexts. Under circumstances of duress there is converging evidence that grandparents can provide support that helps to safeguard their children and grandchildren against adverse risks. We conclude by discussing the role that grandparents could play in what has been referred to as Europe's demographic suicide. (shrink)

Many studies in Western societies show a pattern of discriminative grandparental investment as follows: maternal grandmothers (MGMs) > maternal grandfathers (MGFs) > paternal grandmothers (PGMs) > paternal grandfathers (PGFs). This pattern is in line with the expectation from evolutionary reasoning. Yet whether or not this pattern applies in China is in question. The present study was based on a questionnaire survey at a university in Central China (N = 1,195). Results show that (1) when grandparent–grandchild residential distance during (...) grandchildren’s childhood is controlled, in the case of grandsons and granddaughters as a whole and granddaughters only, both grandparental caregiving and grandchildren’s emotional closeness to grandparents display a rank order of MGM > MGF > PGM > PGF, but in the case of grandsons only, this order is not statistically significant. (2) There are stable relationships between grandparental caregiving/grandchildren’s emotional closeness and residential distance/similarity in appearance. (3) The effects of residential distance on either PGFs’ or PGMs’ caregiving exceed those on either MGFs’ or MGMs’. (4) The PGF and PGM prefer grandsons to granddaughters in their caregiving, whereas the MGF and MGM do not have a sex preference, and (5) the fact that the PGF and PGM invest more in grandsons than in granddaughters does not depend on grandsons’ duration of living in a rural area. Our results suggest that (1) in general, the Chinese display a pattern of differential grandparental investment predicted by an evolutionary perspective, (2) the evolutionary perspective that combines the two factors of paternal uncertainty and sex-specific reproductive strategies is applicable to grandparental investment in China, and (3) the traditional son-preference culture also plays some role in affecting grandparental investment in China, though the roles of culture and urban–rural cultural difference should not be exaggerated. (shrink)

Several theoretical perspectives have generated research on grandparental investment, notably socialization and evolutionary psychological perspectives. Using data collected from more than 200 older adults (mean age 67 years), we test three hypotheses derived from socialization and evolutionary perspectives about grandparents’ relationships with and investment in grandchildren. Results indicate that (1) emotional closeness with both children and children-in-law is positively related to reports of emotional closeness with grandchildren; (2) maternal grandmothers invest more in grandchildren than do other grandparents; (...) and (3) grandparents invest more in daughters’ children than in sons’ children. Discussion addresses limitations of self-report methodology in this context and situates the current findings within the body of research indicating the existence of psychological mechanisms designed to guide differential nepotism. (shrink)

The effects of grandparental investment in relatives are apparent in human groups, suggesting that a postreproductive period in humans is selective. Although investment of relatives in kin produces obvious benefits for kin groups, selection for a postreproductive period in humans is not supported by evidence from chimpanzees. Instead, grandparental investment is likely a recent phenomenon of longevity, rather than an evolved feature.

The target article emphasizes the need to identify psychological mechanisms underlying grandparental investment, particularly in low-risk family contexts. We extend this approach by addressing the changing demands of balancing work and family in low-risk families. Taking a lifespan psychological perspective, we identify additional motivators and potential benefits of grandparental investment for grandparents themselves and for subsequent generations.

What makes the question of grandparental investment so very interesting is trying to tease out the underlying motivations. Grandparental investment is variable and grandparental altruism, if it exists at all, is also variable. Neither evolutionary theory nor rational choice theory has an easy time explaining this variation, and insight is further impeded by the absence of any compelling empirical studies designed for the purpose of testing alternative explanations of variations in grandparental investment.

Selection on grandparental investment is more complex than Coall & Hertwig (C&H) propose. Patterns of investment are subject to an intergenerational conflict over how resources should be distributed to maximize fitness. Grandparents may be selected to distribute resources unevenly, while their descendants will be selected to manipulate investment in their own favor. Here we outline the evolutionary basis of this conflict.

To refine our understanding of grandparental investment and its consequences, we need to understand what grandparents do for their grandchildren. Knowing the landscape of grandparental investment will facilitate a better understanding of the impact of grandparental investment on grandchildren and will allow inroads to be made in bridging the different levels of analysis.

Coall & Hertwig (C&H) suggest that, because grandparental investments do not impact on child mortality in low-risk societies, fitness effects are not plausible any more. We found that grandparental investments could very well alleviate contemporary constraints on fertility. Cultural factors may influence both the occurrence and impact of grandparental investments.

Integration of different lines of research concerning grandparental investment appears to be both promising and necessary. However, it must stop short when confronted with incommensurate arguments and hypotheses, either within or between disciplines. Further, some hypotheses have less plausibility and veridicality than others. This point is illustrated with results that conflict previous conclusions from evolutionary psychology about differential grandparental investment.

This response outlines more reasons why we need the integrative framework of grandparental investments and intergenerational transfers that we advocated in the target article. We discusses obstacles that stand in the way of such a framework and of a better understanding of the effects of grandparenting in the developed world. We highlight new research directions that have emerged from the commentaries, and we end by discussing some of the things in our target article about which we may have been (...) wrong. (shrink)

This commentary suggests that there is more continuity in pre- and post-demographic transition populations with respect to grandparental investments than is assumed by Coall & Hertwig (C&H). Recent research employing high-quality data supports the claim that sex-biased grandparental investments are likely to exist in industrialized societies, and that the economic status of grandparents is related to their long-term fitness.

Coall & Hertwig (C&H) bring attention to alternative accounts of grandparental investment from economics, evolutionary anthropology, psychology, and sociology, which have yet to be reconciled. We attempt to help integrate some of the disparate perspectives by expanding the scope of the evolutionary perspective, highlighting some gaps, and discussing problems with the authors' treatment of grandparents in traditional societies.

Grandparental presence is known to correlate with the number of grandchildren born, and this effect may vary according to grandparental sex and lineage. However, existing studies of grandparental effects on fertility mostly concern traditional subsistence societies, while evidence from contemporary developed societies is both scarce and mixed. Here, we explore how grandparents affect the transition to second and subsequent children in the contemporary United Kingdom. The longitudinal Millennium Cohort Study (n = 10,295 families) was used to study (...) the association between grandparental investment and parents’ probability of having a new child within 4.5 years. Results show that contact with paternal grandparents is associated with higher probability of parents having a second child. In contrast, contact with maternal grandparents is associated with lower probability of having a third or subsequent child. Kin may have opposite effects on fertility even in contemporary societies, which may explain the lack of consistent effects of grandparental investment on fertility in previous studies. (shrink)

In the analysis of intergenerational transfer, several improvements can be made. First, following kin selection theory, grandparents have kin other than grandchildren in which to invest and therefore any investigation into grandparents should take this perspective. Secondly, how transfers actually enhance the survivorship of younger relatives such as grandchildren must be better measured, especially in the ethnographic literature. Finally, the problem of indirect investments or targeting must be considered.

Several studies have suggested a matrilateral bias in allomaternal (non-maternal) infant and child caregiving. The bias has been associated with the allomother’s certainty of genetic relatedness, where allomothers with high certainty of genetic relatedness will invest more in children because of potential fitness benefits. Using quantitative behavioral observations collected on Ngandu 8- to 12-month-old infants from the Central African Republic, I examine who is caring for infants and test whether certainty of genetic relatedness may influence investment by allomothers. Results (...) indicate a matrilateral bias in caregiving by extended kin members, but this does not affect the total level of care infants receive when fathers and siblings are included in the analysis. These results replicate a previous study done among an adjacent foraging population and emphasize the importance of examining children’s complete social environments when addressing caregiving and child development. (shrink)

In a study of the kin investment of aunts and uncles we show that the laterality effect expected as a result of paternity uncertainty is statistically reliable but somewhat smaller than the sex effect. Matrilateral aunts invest significantly more than patrilateral aunts, and the same is true for uncles. Regardless of laterality, however, aunts invest significantly more than uncles. Multivariate controls show that the matrilateral bias is fully independent of any age or distance confounds that might result from sex (...) differences in age at marriage or dispersal. We discuss our results in relation to recent findings on the kin investment of grandparents (Euler and Weitzel 1996). In addition, we propose a simple method for estimating the level of paternity uncertainty from kin investment data; application of this method to our data on aunts and uncles suggests that between 13% and 20% of children are not the offspring of their putative father. Our parallel analyses of Euler and Weitzel’s (1996) data on grandparental investment suggest a similar estimate, that paternity uncertainty lies between 9% and 17%. (shrink)

We conducted a meta-analysis of 17 studies that tested for an association between grandparental survival and grandchild survival in patrilineal populations. Using two different methodologies, we found that the survival of the maternal grandmother and grandfather, but not the paternal grandmother and grandfather, was associated with decreased grandoffspring mortality. These results are consistent with the findings of psychological studies in developed countries (Coall and Hertwig Behavioral and Brain Sciences 33:1-59, 2010). When tested against the predictions of five hypotheses (confidence (...) of paternity; grandmothering, kin proximity, grandparental senescence, and local resource competition), our meta-analysis results are most in line with the local resource competition hypothesis. In patrilineal and predominantly patrilocal societies, the grandparents who are most likely to live with the grandchildren have a less beneficial association than those who do not. We consider the extent to which these results may be influenced by the methodological limitations of the source studies, including the use of retrospective designs and inadequate controls for confounding variables such as wealth. (shrink)

Previous research indicates that birth order is a strong predictor of familial sentiments, with middleborns less family-oriented than first- or last-borns. In this research, effects of sex and birth order on the actual frequency of contact with maternal and paternal kin were examined in two studies. In Study 1, one hundred and forty undergraduates completed a questionnaire relating to the amount of time they spent in contact with specific relatives, while in Study 2, one hundred and twelve undergraduates completed the (...) same questionnaire with the addition of two questions relating to the subjects’ parents’ birth orders. Subjects were more likely to have frequent contact with maternal, as opposed to paternal, kin and women experienced more frequent contact than men with relatives in general. The birth order of subjects did not appear to have a significant influence on contact but the birth order of the subjects’ parents did, with the offspring of middleborn mothers having relatively little contact with maternal grandparents and the offspring of middleborn fathers having relatively little contact with paternal grandparents. These sex and birth order differences are discussed in relation to possible differences in how women and men use kinship ties and in terms of how birth order may influence parental solicitude. (shrink)

1,857 adults rated the grandparental solicitude they received in childhood. Through a simple model based on the evolutionary concepts of ontogenetically differentiated reproductive strategy and paternity confidence, an ordered discriminative pattern of grandparental caregiving was predicted and confirmed by solid main effects, based on 603 complete cases. The maternal grandmother was the most caring. Unlike prevalent gender stereotypes, she was followed by the maternal grandfather, the paternal grandmother, and the paternal grandfather. The preferential grandparental solicitude was not (...) influenced by residential distance, grandparent age, and availability of other grandparents. A predicted higher correlation for male than for female progenitors between solicitude and phenotypic resemblance could be confirmed. (shrink)

Support from grandparents plays a role in mothers’ perinatal mental health. However, previous research on maternal mental health has mainly focused on influences of partner support or general social support and neglected the roles of grandparents. In this narrative review and meta-analysis, the scientific evidence on the association between grandparental support and maternal perinatal mental health is reviewed. Searches in PubMed, EMBASE, MEDLINE, Scopus, and PsycINFO yielded 11 empirical studies on N = 3381 participants, reporting on 35 effect sizes. (...) A multilevel approach to meta-analysis was applied to test the association between grandparental support and maternal mental health. The results showed a small, statistically significant association (r =.16; 95% CI: 0.09–0.25). A moderator test indicated that the association was stronger for studies reporting on support from the maternal grandmother in particular (r =.23; 95% CI: 0.06–0.29). Our findings suggest that involved grandparents, in particular mother’s own mother, constitute a protective factor for the development of maternal postpartum mental health problems. These findings have clear implications for interventions. Future studies should examine whether stimulating high-quality support from grandparents is a fruitful avenue for enhancing maternal postpartum mental health. (shrink)

Grandparental altruism may be partially understood in the same way as other instances of altruism. Acts of altruism often occur in a context in which the actor has a broader sense of cause and effect than is evident in more typical behavioral interactions where cause and effect appear relatively transparent. Many believe that good deeds will ultimately produce good results.

This article addresses the growing industry of retail socially responsible investment (SRI) profiled mutual funds. Very few previous studies have examined the final consumer of SRI profiled mutual funds. Therefore, the purpose of this study was to, in an exploratory manner, examine the impact of a number of pro-social, financial performance, and socio-demographic variables on SRI behavior in order to explain why investors choose to invest different proportions of their investment portfolio in SRI profiled funds. An ordinal logistic (...) regression analysis on 528 private investors revealed that two of the three pro-social variables had a positive impact on how much the consumer invested in SRI profiled funds. Moreover, there was proof of a non-altruistic motive for investing in SRI as consumers who perceive that financial return of SRI is equal or better than "regular" mutual funds, invested a greater proportion of their portfolio in SRI profiled mutual funds. Furthermore, the results showed that women and better-educated investors were more likely to invest a greater proportion of their investment portfolio in SRI. Overall, the findings indicate that both financial perceptions and pro-social attitudes are connected to consumer investment in SRI. (shrink)

There is a growing body of literature on ethical or socially responsible investment across a range of disciplines. This paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners. One of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour. Noting that ethical investment is seldom characterised by agreement about what it actully constitutes, and that much (...) of the extant research focuses on a narrow set of issues, the paper argues that there are benefits associated with examining ethical investment as a process. (shrink)

In order to evaluate the impact of contemporary grandparenting, the view should not be restricted to developmental achievement effects in grandchildren. Both child happiness and grandparent happiness are high-ranking goals with implications for public policy. The beneficial impact of grandparenting for risk families appears unequivocal, and modern life still encounters all kinds of unpredictable risks. Contemporary grandparental care is no evolutionary mismatch.

Environmental, social, and governance (ESG) investing is synonymous with sustainable investment for socially responsible investors. Unfortunately, the diversity of ESG investing remains unattended amidst the growth in ESG literature, as the academic literature focuses dominantly on measuring performance. An understanding of a wide range of subjects entailing ESG is required before future research on ESG investing is performed. To overcome the challenge, this systematic literature review uses bibliometric mapping to reveal four significant research themes within the ESG investing literature: (...) investor behavior and motivations for ESG investing; cost and risk mitigation in ESG investing; portfolio screening and ESG investing; and ESG performance. The review critically examines each theme and broadens the research agenda for future studies. In addition to the significant themes, this paper also discusses theoretical and recent research trends in the ESG investing literature. The review identifies clashes and crossovers between these themes to appropriately interpret one theme using another and emphasizes the heterogeneity in ESG investing. Lastly, discussion over concerns and criticisms of ESG investing highlights greenwashing as a major cause of concern for investors. (shrink)

>With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporations long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a companys long-term performance. Conventional wisdom argues that the fiduciary responsibility of the (...) pension funds trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to socially responsible investing (SRI) and when applied to corporations, it is termed socially responsible corporate conduct (SRCC). We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients, i.e. pension funds, best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

Interest in the notion of the possible financial sacrifice suffered by socially responsible investment (SRI) fund investors for considering ethical, social and environmental issues in their investment decisions has spawned considerable academic interest in the performance of SRI funds. Both the Australian and international research literature have yielded largely mixed results. However, several of these studies are hampered by methodological problems which can obscure the significance of reported results, such as the use of small sample sizes, inconsistencies in (...) the time frames selected to analyse performance and different modelling frameworks used to estimate investment returns. This study attempts to redress some of these issues by investigating the returns performance of 89 ethical funds in Australia over the period 1986-2005. Using a multi-factor CAPM model [Fama, E. F., and K. R. French (1996) J. Finance 51(1), 55] (which controls for factors such as size, book-to-market value and momentum) we find that ethical funds significantly under-perform the market in Australia, particularly in the most recent 5 years of our sample period (2000-2005). Risk adjusted returns (using Jensen's alpha) indicate that average annual underperformance is around 1.52% in the 2000-2005 period for our sample and .88% over the whole sample period. Our results contrast with many previous studies (both Australian and international), which have not found statistically significant differences in the performance of ethical funds relative to market benchmarks and/or a matched sample of conventional funds. (shrink)

Ethical or socially responsible investment is one of the most rapidly growing areas of finance. New government regulations mean that all pension funds are obliged to take such considerations into account. However, this phenomenon has received little critical attention from business ethicists, and a clear conceptual framework is lacking. This paper, by a practitioner in the field, attempts to fill this analytical gap. It considers what difference, if any, lies between the terms ‘ethical’, ‘green’, or ‘socially responsible’. It also (...) tackles the difficult question of how any public form of investment can be called ‘ethical’ in an overtly pluralistic society. The paper provides an account of the historical development of ethical investment, and traces the evolution of the varying terms used to describe it. This is followed by a conceptual analysis of these terms, and a description of ethical decision‐making in this context. The paper ends by considering the role of shareholder action within ethical investment, and assesses the utility of the stakeholder model as a theoretical justification. (shrink)

Ethical investing is all the rage. Unfortunately, excitement about it has outpaced plausible philosophical discussions. This article asks and answers two questions: “What counts as investment?”, and “What moral choices do investors have?”. I answer the first question broadly. Investment is pervasive in our economy, and by participating we share responsibility for corporate practices. These facts lead to an “austere conclusion”: short of outright withdrawal from the standard forms of investment, we have little hope of avoiding participation (...) in immoral activities. Thus we must withdraw. Fortunately, the answer to the second question mitigates this disturbing result. Under certain circumstances, shareholder activism aimed at moral goals is a valuable way to participate in a deeply flawed system. By demonstrating the pervasiveness of investment and analogies with consumption and democratic political participation, the conclusions of this paper illuminate not only the ethics of investment but a more-general problem of individual responsibility in complex institutions. The paper is informative both for its applicability to these latter questions, and for its demonstration that investment is not merely a side-topic for business ethics texts, but rather a central problem of modern market societies. (shrink)

Socially responsible investment (SRI) – sometimes termed “ethical investment” – refers to the practice of integrating social, environmental, or ethical criteria into financial investment decisions. Whereas conventional investment focuses upon financial risk and return from stocks and bonds, SRI includes other goals or constraints. It is the nature of the source, and not just the size, of the financial return that is of concern in SRI. This article introduces the principal investment strategies generally pursued under (...) SRI, and then focuses specifically on the ethical dimension – that is, whether current SRI practices constitute an ethically justified, perhaps even ethically superior, way of investing. (shrink)

Do foreign direct investment (FDI) and international business ventures promote positive social and economic development in emerging nations? This question will always prove contentious. First, the impacts differ according to context. Second, the social consequences and spillover effects of knowledge diffusion and technology-sharing may be limited and hard to measure. Third, contributions to enhancing social responsibility and improving living standards in host countries are delayed in effect, causally complex, and also hard to measure. Outcomes often critically depend on collaboration (...) of governments, international institutions, the business world, and non-governmental organizations (NGOs). Research in this area is challenging and requires interdisciplinary collaboration between economists, financial experts, sociologists, ethicists, and other specialists. This paper explores: (1) the evidence to support the proposition that FDI and international business improve social conditions in less-developed countries, and: (2) how these improvements are linked to strategies of corporate social responsibility (CSR) and ethical business practice. The paper draws insights from development, FDI, poverty alleviation, and bottom-of-the-pyramid (BOP) literature. Applications are demonstrated using examples from poverty-stricken areas of Sub-Saharan Africa. The paper attempts not only to argue theoretically but also to provide practical evidence. The approach is simultaneously descriptive, analytical, and prescriptive in order to address a wide audience. It also highlights issues and trends for further academic research and presents the viewpoint that some limitations lie in the nature of ethics frameworks widely referenced in business and that these often fail to consider the compatibility of ethical constructs with relevant incentives. In this vein, we explore the application of Homann’s framework for advantage and incentive-based ethics. (shrink)

This study examines child survival and growth in a patrilineal Ethiopian community as a function of father absence and sex. In line with evolutionary predictions for sex-biased parental investment, the absence of a father and associated constraints on household resources is more detrimental for sons’ than daughters’ survival in infancy. Father absence doubles a son’s risk of dying in infancy but has a positive influence on the well-being of female members of the household, improving daughter survival, growth, and maternal (...) nutritional status. Lack of paternal investment may be compensated for by other matrilateral kin through increased reciprocity between mother, daughter, and sister. (shrink)

Artificial Intelligence (AI) has become a driving force in modern research, industry and public administration and the European Union (EU) is embracing this technology with a view to creating societal, as well as economic, value. This effort has been shared by EU Member States which were all encouraged to develop their own national AI strategies outlining policies and investment levels. This study focuses on how EU Member States are approaching the promise to develop and use AI for the good (...) of society through the lens of their national AI strategies. In particular, we aim to investigate how European countries are investing in AI and to what extent the stated plans contribute to the good of people and society as a whole. Our contribution consists of three parts: (i) a conceptualization of AI for social good highlighting the role of AI policy, in particular, the one put forward by the European Commission (EC); (ii) a qualitative analysis of 15 European national strategies mapping investment plans and suggesting their relation to the social good (iii) a reflection on the current status of investments in socially good AI and possible steps to move forward. Our study suggests that while European national strategies incorporate money allocations in the sphere of AI for social good (e.g. education), there is a broader variety of underestimated actions (e.g. multidisciplinary approach in STEM curricula and dialogue among stakeholders) that can boost the European commitment to sustainable and responsible AI innovation. (shrink)

“Ethical investing” is interpreted in the following paper to be the use of non-financial normative criteria by investors in the choice ofsecurities for their portfolios.Ethical investors may aim at fulfilling duties they feel they have, possibly including increasing the amount of good in society through theconsequences of their buying and selling behavior. The main duties are those of not-profiting from bad corporate behavior and of punishing bad firms. The main consequence desired is that managers manage corporations in a more ethical (...) manner. But ethical investors also aim at receiving returns based on the market risk of their investments.If the aim of managers is to maximize shareholder wealth, then ethical investors can fulfill their duties or achieve their desired consequences only if their trading activities affect shareholder wealth, i.e., share price. A theoretical argument is presented to show that this trading activity will not affect share price or return. In addition, reference is made to results of empirical studies which show that ethical stocks yield market returns, i.e., that the share price of ethical firms is unaffected by the actions of ethical investors.If the trading activity of ethical investors fails to affect share price and return, then these investors fail to fulfill any of their goals or to achieve their ends. (shrink)

With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporation's long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a company's long-term performance. Conventional wisdom argues that the fiduciary responsibility of the (...) pension funds' trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds' beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to "socially responsible investing" and when applied to corporations, it is termed "socially responsible corporate conduct." We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients', i.e. pension funds', best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies' stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic. (shrink)

Ethical or socially responsible investment is one of the most rapidly growing areas of finance. New government regulations mean that all pension funds are obliged to take such considerations into account. However, this phenomenon has received little critical attention from business ethicists, and a clear conceptual framework is lacking. This paper, by a practitioner in the field, attempts to fill this analytical gap. It considers what difference, if any, lies between the terms ‘ethical’, ‘green’, or ‘socially responsible’. It also (...) tackles the difficult question of how any public form of investment can be called ‘ethical’ in an overtly pluralistic society. The paper provides an account of the historical development of ethical investment, and traces the evolution of the varying terms used to describe it. This is followed by a conceptual analysis of these terms, and a description of ethical decision‐making in this context. The paper ends by considering the role of shareholder action within ethical investment, and assesses the utility of the stakeholder model as a theoretical justification. (shrink)

Post-conflict economies often prove daunting for foreign investors. Many of these nations are reaching out to diasporans, emigrants, and their descendants living abroad, for much-needed foreign investment capital. Little is known about why diasporans invest in their countries of origin. Recent scholarly inquiry regarding investment decision making has suggested that non-pecuniary, psychological concerns often motivate investment decisions. We develop a conceptual model identifying three types of investment return expectations — financial, emotional, and those related to social (...) status — that may drive diaspora investment interest. We contend that the psychological realities and social-status structure of the diaspora experience generate greater salience for non-pecuniary investment motivations, particularly when the origin country emerges from a period of conflict. We outline an agenda for future research and discuss the implications of our model for policies seeking to promote peace utilizing diaspora investment. (shrink)

Can the perception that one’s partner is investing effort generate a sense of commitment to a joint action? To test this, we developed a 2-player version of the classic snake game which became increasingly boring over the course of each round. This enabled us to operationalize commitment in terms of how long participants persisted before pressing a ‘finish’ button to conclude each round. Our results from three experiments reveal that participants persisted longer when they perceived what they believed to be (...) cues of their partner’s effortful contribution. Crucially, this effect was not observed when they knew their partner to be an algorithm, nor when it was their own effort that had been invested. These results support the hypothesis that the perception of a partner’s effort elicits a sense of commitment, leading to increased persistence in the face of a temptation to disengage. (shrink)

This paper examines the different mechanisms used by multinational corporations (MNCs) in Nigeria seeking to make long-term social investments by meeting the critical challenge of improving water provision. Community enterprise – an increasingly common form of social enterprise, which pursues charitable objectives through business activities – may be the most effective mechanism for building local capacity in a sustainable and accountable way. Traditionally, social investments by MNCs have involved either donations to a charity, which then assumes responsibility for delivering social (...) outcomes, or direct management of social investment in-house. These approaches have been criticized, however, for their limited contribution to local capacity building, their focus on short-term outcomes, and the restricted role that they afford to communities. Partnering with community enterprise, provided there is sufficient local capacity to support it, is the most effective mode of governance through which MNCs can manage social investments in developing countries. (shrink)

Can the perception that one’s partner is investing effort generate a sense of commitment to a joint action? To test this, we developed a 2-player version of the classic snake game which became increasingly boring over the course of each round. This enabled us to operationalize commitment in terms of how long participants persisted before pressing a ‘finish’ button to conclude each round. Our results from three experiments reveal that participants persisted longer when they perceived what they believed to be (...) cues of their partner’s effortful contribution. Crucially, this effect was not observed when they knew their partner to be an algorithm, nor when it was their own effort that had been invested. These results support the hypothesis that the perception of a partner’s effort elicits a sense of commitment, leading to increased persistence in the face of a temptation to disengage. (shrink)

Industrial investment funds are a new financing innovation mode that can build an effective financing channel for enterprises.Based on the panel data of Chinese Listed Companies in 2008–2017, this manuscript constructed a static panel model between industrial investment funds, government R&D subsidies, and technological innovation to empirically analyze the effects of industrial investment fund involvement and government R&D subsidies on companies’ technological innovation. The research shows that industrial investment fund involvement can increase the company’s R&D (...) class='Hi'>investment by providing financial funds for the company, which can effectively solve the company’s lack of funds in the process of technological innovation and guarantee the smooth running of the company’s innovation activities. Secondly, government R&D subsidies can alleviate the pressure of R&D investment to a certain extent, which is conducive to promote a higher level of technological innovation in the company. Thirdly, for companies with industrial investment fund involvement, government R&D subsidies are conducive to promote technological innovation. In contrast, for companies without industrial investment fund involvement, government R&D subsidies have no significant impact on technological innovation to a certain extent or even have a “crowding out effect.”. (shrink)

Innovations in aligning investment with sustainability led to impact investing, enabling investors to achieve conventional financial returns and measurable social and environmental returns. Since its inception in 2007, it has grown manifolds, with significant efforts being made to create a global ecosystem. However, due to limited academic literature, the theme is yet to garner the scholarly interest it deserves. In this study, we analyse and visualise a knowledge map of the impact investment research field through a comprehensive bibliometric (...) analysis by employing a research corpus of 421 studies sourced from Web of Science and Scopus. We identify the growth trajectory, geographical concentration, productive and influential authors, journals and significant articles and examine the inter-disciplinarity of the field. The major research themes interlinked with impact investing included; social entrepreneurship, social innovation, social finance, impact investment market, innovative financial instruments, financialisation of essential services and impact reporting. To drive the field forward, future research needs to develop an impact investment ecosystem, address behavioural issues, stakeholder management and institutional context in impact investment theme, develop and diffuse innovative financial instruments, develop a framework for standardised accounting and reporting practices to measure financial and non-financial dimensions, tackle impact washing by fund managers, address lack of financial access to the third sector and develop the legal and regulatory framework for third sector organisations. (shrink)

Ethical investors are widely thought of as having two main goals. The negative goal of avoiding their investments to be morally tainted. The positive goal to further a certain ethical value they embrace or some normatively laden idea they hold by investing their money in a certain company. In light of these goals, the purpose of this paper is to provide an account of how we can explicitly include investors’ intentions when conceiving of ethical investment. The central idea is (...) that an investor’s intentions may act as both a negative and a positive qualifier for making investing ethical. If we subscribe to this account, there are interesting upshots with respect to how ethical investing compares to ethical giving as effective altruists construe it. (shrink)

This article provides information about Berne's financial situation at the time the Economic Society was founded. The canton was in an exceptionally fortunate position, having accumulated a sizeable cash reserve that was in part used for loans and investments on the London capital market. Throughout the century, the Bernese government followed a very cautious investment strategy. The main reason for purchasing overseas securities was that they helped the patricians to become independent from tax-paying subjects. Economic imperatives ruled out increases (...) of the cash reserve or further involvement in the overcrowded domestic capital market. However, by investing abroad Berne became increasingly dependent on the goodwill of its debtors, for which it was criticised by the Economic Patriots amongst others. (shrink)