The value of Saints and the price of Sin
© 2014 Elsevier B.V. Using firms in the MSCI KLD 400 as exemplars of virtuous firms (the “Saints“), and firms in the “Triumvirate of Sin“ - alcohol, tobacco and gaming - we utilize a modification of the Feltham and Ohlson (1995) valuation model and quantile regressions to estimate “Saint premiums“ a...
| Main Authors: | , , |
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| Format: | Journal Article |
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Elsevier B.V
2015
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| Online Access: | http://www.elsevier.com/ http://hdl.handle.net/20.500.11937/42074 |
| Summary: | © 2014 Elsevier B.V. Using firms in the MSCI KLD 400 as exemplars of virtuous firms (the “Saints“), and firms in the “Triumvirate of Sin“ - alcohol, tobacco and gaming - we utilize a modification of the Feltham and Ohlson (1995) valuation model and quantile regressions to estimate “Saint premiums“ and “Sinner discounts“. For firms followed by sell-side analysts, the Saint premium is, on average, $5.77 (a 19.2% premium over the share price) and the Sinner discount is, on average, $3.91 (a discount of 32.1% of the share price). The evidence supports the notion that CSR creates shareholder value. Practices contrary to social norms destroy value. |
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