Active Ownership

Dimson, Elroy; Karakaş, Oğuzhan; Li, Xi

doi:10.2139/ssrn.2154724

Cited by 103 publications

(169 citation statements)

References 66 publications

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“…The nation's culture and political philosophy will be expressed through decisions regarding each variable in this flow diagram. Open, democratic societies typically establish funds through explicit legislation, endow them with financing from a dedicated revenue source, provide specific operating and investment objectives, mandate high standards of employee professionalism and information disclosure, and frequently also give them a mandate to invest ethically (Dimson et al ., ). Less democratic societies make different choices at these margins when establishing their funds, with varying emphasis being placed depending on the goals of the sponsoring regime.…”

Section: How Are Sovereign Wealth Funds Organized and Operated?mentioning

confidence: 97%

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Megginson

Fotak

2015

Journal of Economic Surveys

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We survey the literature documenting the rise of sovereign wealth funds (SWFs), which, with assets under management of over $5.4 trillion at year‐end 2014, are a major force in global finance. Research papers have analyzed the evolution of SWFs from stabilization funds to stand‐alone wealth management funds; we both survey this research and show that more than 25 countries have launched or proposed new SWFs since January 2008. The most salient and controversial feature of SWFs is that they are state‐owned; we survey the existing literature on state ownership and discuss what this predicts about the efficiency and beneficence of government control of SWF assets. We discuss the documented importance of SWF funding sources (oil sales revenues versus excess reserves from export earnings) and survey the normative literature describing how SWFs should allocate funds. We then summarize the empirical literature studying how SWFs actually do allocate funds—across asset classes, geographically, and across industries. We document that most SWF equity investments in publicly traded firms involve cross‐border purchases of sizeable minority stakes (median around 20%) in target firms, with a strong preference for investments in the financial sector. Next, we assess empirical studies examining the impact of SWF stock investments on target firm financial and operating performance, and find universal support for a positive announcement period stock price increase of 1–3%. This, however, is significantly lower than the 5% abnormal return documented for stock purchases by comparable privately owned financial investors in recent studies, indicating a “sovereign wealth fund discount.” We conclude by summarizing the lessons of SWF research and pointing out unresolved issues.

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Section: How Are Sovereign Wealth Funds Organized and Operated?mentioning

confidence: 97%

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Megginson

Fotak

2015

Journal of Economic Surveys

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“…For example, Servaes and Tamayo (2013) show that CSR and firm value are positively related for firms with high customer awareness (as is the case for banks during the financial crisis). Dimson et al (2012) find that firms are more likely to undertake CSR and CSR is more likely to be value enhancing if the firm is concerned about its reputation (also the case for banks during the financial crisis) and if it has higher capacity to implement changes. 1 El Ghoul et al (2011) find that firms with better CSR scores exhibit cheaper equity financing, while Goss and Roberts (2011) find that more socially responsible firms pay between 7 and 18 basis points less than firms with social responsibility concerns.…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 98%

Corporate Social Responsibility and Its Impact on Financial Performance: Investigation of the U.S. Commercial Banks

2013

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This paper analyzes corporate social responsibility (CSR) for banks and its impact on bank financial performance in a context of the recent financial crisis. The largest banks consistently have higher CSR strengths and CSR concerns during the sample period. However, this group sees a steep increase in CSR strengths and a steep drop in CSR concerns after 2009. Banks that are profitable, have higher capital ratios, charge lower fees to deposits, and with more female and minority directors have significantly higher CSR strengths scores. For banks with low involvement in low income communities, it is the smallest banks that show many significant relations between corporate social responsibility and bank characteristics. Yet, for banks with high involvement in low income communities, it is the largest banks that show many significant relations. Finally, we find that the largest banks appear to be rewarded for their social responsibility, as both industry adjusted ROA and ROE are positively and significantly related to CSR scores. JEL Classification: G21, L21, L25, M14

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“…Our model predicts that SRI strategies will be more transformative if they are supported by theories that encourage experimentation and if the experimentation produces anomalies that may convince initially unconvinced investors. For example, recent academic studies on shareholder engagement (Dimson, Karakaş, & Li, 2015) have been received very positively in the financial sector and may therefore lead to experimentation and, subsequently, to anomalies.…”

Section: /53mentioning

confidence: 99%

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

Marti

Gond

2018

AMR

127

146

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Management researchers increasingly realize that some theories do not merely describe, but also shape social reality; a phenomenon known as "performativity." However, when theories become performative or even self-fulfilling is still poorly understood. Taking this gap in current research as our starting point, we develop a process model to show that new theories will only become self-fulfilling (1) if they motivate experimentation, (2) if experimentation produces anomalies, and (3) if these anomalies lead to a practice shift. On that basis, we identify six boundary conditions that determine whether theories will come to shape social reality. To illustrate our argument, we explore the conditions under which theories that postulate a positive link between corporate social performance and corporate financial performance may become self-fulfilling. KEYWORDS:Anomalies, boundary conditions, corporate social performance (CSP), experimentation, performativity, socially responsible investing (SRI) 3/53In the course of the last decade, management scholars and other researchers in the social sciences increasingly realized that some theories do not merely describe, but also shape the patterns of social interaction that constitute social reality (Callon, 1998;. They dubbed this phenomenon "performativity." The most "intriguing" cases of performativity arise when theories become self-fulfilling; that is, when using theories increases the "conformity" between theories and social reality (MacKenzie, 2006: 18-19). A well-known example thereof is the Black-Scholes theory, where using that theory pushed option prices toward the prices that the theory predicted (MacKenzie & Millo, 2003). In such cases, theories can become self-fulfilling by reshaping the language, social norms, and institutional designs of traders, managers, policy-makers, or other actors (Ferraro, Pfeffer, & Sutton, 2005a).Further studies in this tradition examined, for example, how rational choice theory makes decision-making within organizations more rational (Cabantous & Gond, 2011) or how mainstream financial theories reinforce the currently widespread technocratic approach to financial regulation (Marti & Scherer, 2016).Most studies on performativity to date focus on theories that have successfully transformed social reality. However, because of this "success bias," the literature lacks a clear understanding of the conditions that determine whether theories become performative or not. This lack of understanding becomes particularly apparent where the "strongest" forms of performativity (MacKenzie, 2006: 19) are concerned; that is, when theories become self-fulfilling (Healy, 2015: 176). Current research thereby neglects the insight of Felin and Foss (2009b) that social reality is not invariably malleable. Keeping in mind these shortcomings of previous research on performativity, we set out to explore how boundary conditions determine whether a theory will become self-fulfilling or not. 4/53To analyze these boundary conditions, we start by developin...

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Active Ownership

Cited by 103 publications

References 66 publications

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Corporate Social Responsibility and Its Impact on Financial Performance: Investigation of the U.S. Commercial Banks

When Do Theories Become Self-Fulfilling? Exploring the Boundary Conditions of Performativity

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