Purpose – The purpose of this paper is to analyze the emerging crowd‐funding phenomenon, that is a collective effort by consumers who network and pool their money together, usually via the internet, in order to invest in and support efforts initiated by other people or organizations. Successful service businesses that organize crowd‐funding and act as intermediaries are emerging, attesting to the viability of this means of attracting investment.Design/methodology/approach – The research employs a “grounded theory” approach, performing an in‐depth qualitative analysis of three cases involving crowd‐funding initiatives: SellaBand in the music business, Trampoline in financial services, and Kapipal in non‐profit services. These cases were selected to represent a diverse set of crowd‐funding operations that vary in terms of risk/return for the investor and the type of payoff associated to the investment.Findings – The research addresses two research questions: how and why do consumers turn into crowd‐funding ...

Crowd-Funding: Transforming Customers into Investors through Innovative Service Platforms

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.

Investment with a Conscience: Examining the Impact of Pro-Social Attitudes and Perceived Financial Performance on Socially Responsible Investment Behavior

Manuscript Type: Empirical Research Question/Issue: This study examines how different types of owners relate to corporate social responsibility ( CSR). Research Findings/Insights: We use firm-level data for more than 600 European firms from 16 countries and 35 industries for 2005. We find that ownership by employees, individuals, and firms is associated with relatively poor corporate social policies of the firms they invest in. In contrast, the holdings by banks and institutional investors as well as those by the state appear to be neutral in this respect. Theoretical/Academic Implications: This study develops and tests notions as to how particular types of owners could have a specific impact on the firm's CSR. The relative value put upon CSR can differ along different types of owners. This results from their different economic roles in society. The study provides empirical support for the relationship between ownership type and CSR policies in Europe. As such, it provides a new focus on the content of shareholder activism, namely that shareholder background has to be taken into account. Another innovation is that we show it is important to account for the multidimensional nature of CSR as well. Practitioner/Policy Implications: This study offers a new perspective for firms, investors and other stakeholders about portfolio investments and CSR. As we find that it does matter who invests, corporate engagement policies can be directed much more effectively. In particular, the investors who act as intermediaries appear to be the most sensitive ones in this respect. Our study suggests that firms should take the background of their shareholders into account in relation to their CSR strategy. Furthermore, our study helps stakeholders to direct their efforts more effectively. It also provides a perspective for executives and investment managers of multinational firms to consider if and how they can create social value next to shareholder value. We suggest that policy makers promote the transparency of ownership information as well as that of CSR performance.

Does Ownership Type Matter for Corporate Social Responsibility

Given the growing importance of Socially Responsible Investing (SRI), it is surprising that there is no consensus of what the term SRI means to an investor. Further, most studies of this question rely solely on the views of investors who already invest in SRI funds. Our study surveys a unique pool of approximately 5,000 investors that contains both investors who have used SRI criteria in investment decisions and those who have not, and involves a broad array of criteria associated with SR investing. Our findings offer new insight into the SRI debate. For both sets of investors, environmental and sustainability issues dominate as the major category associated with SR investing. We find strong agreement in the ranking of the relative importance of various SRI factors despite differences between these two groups in their opinion of their overall importance. We also find that investors prefer to consider the SRI question in more holistic terms rather than using the exclusionary format favored by most SRI funds. Investors seem to prefer to reward firms who display overall positive social behavior rather than to exclude firms on the basis of certain products or practices. These findings can help providers of SR investment vehicles to improve the SRI products that they offer to the general investor, thus both encouraging the initial adoption of SR criteria by investors and increasing overall investment in SR choices.

Socially Responsible Investing: An Investor Perspective

In this paper, we use online search engines and archive collections to examine the popularity of socially responsible investing (SRI) in newspapers and academic journals. A simple content analysis suggests that most of the papers on SRI focus on financial performance. This profusion of research is somewhat puzzling as most of the studies used roughly the same methodology and obtained very similar results. So, why are there so many studies on SRI financial performance? We argue that the academic literature on SRI is mostly data driven: the famous ‘looking for the keys under the lamppost’ syndrome. The question of the financial performance of the SRI funds is certainly relevant but maybe too much attention has been paid to this issue, whereas more research is needed on a conceptual and theoretical ground, in particular the aspirations of SRI investors, the relationship between regulation and SRI as well as the assessment of extra-financial performances.

/pdf/trends-in-the-literature-on-socially-responsible-investment-1pred8d5e1.pdf

Trends in the literature on socially responsible investment: looking for the keys under the lamppost

Socially responsible investment is a rapidly emerging phenomenon within the field of personal investment. However, the factors that lead investors to choose socially responsible investment products are not well understood, especially in an Australian context. This study provides a comparative examination of conventional and socially responsible investors, with the aim of identifying such factors. A total of 55 conventional investors and 54 ethical investors participated in the study by completing mailed questionnaires about their investment and general behaviour and their attitudes and beliefs. Results indicated some important differences between socially responsible and conventional investors in their beliefs of the importance of ethical issues, their investment decision-making style, and their perceptions of moral intensity. These results support the notion that socially responsible investors differ in critical ways to conventional investors, and are discussed in terms of theoretical and practical implications.

Jonathan McLachlan

Papers

A Comparison of Socially Responsible and Conventional Investors