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Publications
  • 2020
  • Working Paper

The Allocation of Socially Responsible Capital

By: Daniel Green and Benjamin N. Roth
  • Format:Print
  • | Language:English
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Abstract

A rapidly increasing share of asset allocation decisions incorporate social values in addition to financial considerations. We argue that the most common strategies for socially motivated investing, which only consider the social value of the firms in an investors' portfolio, are misguided. We develop a tractable framework in which commercial and social investors compete, and identify alternative strategies for social investors that result in higher social welfare and deliver higher financial returns. We discuss several normative implications for socially-motivated investors. From the enterprise perspective, we demonstrate that a focus on increasing profitability can have a greater social impact than a focus on direct social value creation.

Keywords

Socially Responsible Investing; Assets; Resource Allocation; Social Issues; Decision Making; Strategy; Framework

Citation

Green, Daniel, and Benjamin N. Roth. "The Allocation of Socially Responsible Capital." Working Paper, November 2020.
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About The Authors

Daniel W. Green

Finance
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Benjamin N. Roth

Entrepreneurial Management
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More from the Authors

    • February 2021
    • Journal of Financial Economics

    A Dynamic Theory of Multiple Borrowing

    By: Daniel Green and Ernest Liu
    • 2020
    • Faculty Research

    India's Food Supply Chain During the Pandemic

    By: Matt Lowe, V G Nadhanael and Benjamin N. Roth
    • November 2020
    • American Economic Journal: Economic Policy

    Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand

    By: Daniel Green, Brian Melzer, Jonathan Parker and Arcenis Rojas
More from the Authors
  • A Dynamic Theory of Multiple Borrowing By: Daniel Green and Ernest Liu
  • India's Food Supply Chain During the Pandemic By: Matt Lowe, V G Nadhanael and Benjamin N. Roth
  • Accelerator or Brake? Cash for Clunkers, Household Liquidity, and Aggregate Demand By: Daniel Green, Brian Melzer, Jonathan Parker and Arcenis Rojas
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