How does the Market Price of the Corporate Sponsor React to Socially Responsible Fund Introductions?

This paper studies the impact of a Socially Responsible (SR) fund launch on the market price of the corporate sponsor promoting the fund. Our evidence suggests that while overall the introduction of a SR fund does not increase, on the short run, the market value of the corporate sponsor, the market reaction to such announcements evolved through time from very skeptical in the early stages of the SR funds industry to positive over the most recent years. Moreover, SR funds launching during periods of market stress is more rewarding than the same strategy under normal market conditions, while the introduction of multiple funds simultaneously also leads to a short run increase of the market value of the corporate sponsor.
JEL Codes: G14; G21; G23.
Keywords: Corporate Sponsor; Ethical Finance; Event Study; SR Funds.