In good news for SET businesses trying to raise funds, a recent experiment rejected the “selfish investor hypothesis.” The study showed that investors are willing to pay a premium for shares in firms that create positive externalities and pay less for shares that create negative externalities. This is true even for people who are making investment decisions on behalf of others.
Bonnefon, Jean-Francois and Landier, Augustin and Sastry, Parinitha and Thesmar, David, Do Investors Care About Corporate Externalities? Experimental Evidence (September 23, 2019). HEC Paris Research Paper No. FIN-2019-1350. Available at SSRN: https://ssrn.com/abstract=3458447 or http://dx.doi.org/10.2139/ssrn.3458447