The risk and performance of ethically compliant investment
This paper presents a discussion of prior literature on the risk and performance of ethically compliant equity. This review of literature provides an organised evaluation of the available studies in ethical investment. In particular, this paper presents surveys of literature concerning shariah-com...
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Main Authors: | , , |
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Format: | Article |
Language: | English English |
Published: |
Penerbit Universiti Sultan Zainal Abidin
2020
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Subjects: | |
Online Access: | http://eprints.unisza.edu.my/7310/1/FH02-FPP-20-44732.pdf http://eprints.unisza.edu.my/7310/2/FH02-FPP-20-44733.pdf http://eprints.unisza.edu.my/7310/ |
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Summary: | This paper presents a discussion of prior literature on the risk and performance of ethically compliant equity. This review of literature
provides an organised evaluation of the available studies in ethical investment. In particular, this paper presents surveys of literature
concerning shariah-compliant equity and socially responsible investments. The discussion of the literature synthesises the
information in the respective studies into a summary. Each subsection provides an analysis of the information gathered by first
providing an overview of the current empirical studies and, second, identifying gaps and showing the limitation of theoretical views
in the existing studies. Discussion in previous literature emphases only one type of ethical investment, however, this paper, on the
other hand, covers both the religious and social perspectives of ethics, which provide a more comprehensive view of ethics. The
paper finds out that studies on the risk and performance of ethically compliant investment report mixed results. This is due to the
disparities in the research methodological approach. However, it is almost unanimous that ethical funds demonstrate higher stability
(lower risk) during the financial crisis and tend to outperform the conventional funds during this state of financial uncertainty. Future
studies can conduct more firm-level analysis and integrates both screening criteria (shariah and socially responsible screening) to
reconcile the results. |
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