The price of sin in the Pacific-Basin

Robert B. Durand, SzeKee Koh and Paul LiJian Tan

Pacific-Basin Finance Journal, 2013, vol. 21, issue 1, 899-913

Abstract: Hong and Kacperczyk (2009) argue that social norms against sin stocks influence investor behavior and corporate financial policies. This paper examines “sin” stocks in seven Pacific-Basin markets that exhibit a variety of social norms: Australia, India, Japan, South Korea, Malaysia, New Zealand and Singapore. In doing so, we provide further evidence on the pricing of sin stocks. Consideration of measurable cultural differences between the markets suggests the price of sin is a manifestation of groupthink.

Keywords: Asset pricing; Behavioral finance; Corporate financial policy; Socially responsible investment; Social norms; Groupthink (search for similar items in EconPapers)
JEL-codes: G12 G15 M14 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:21:y:2013:i:1:p:899-913

DOI: 10.1016/j.pacfin.2012.06.005

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