Research On The Socially Responsible Investing

As a new investment style, socially responsible investing has been a prevailing investment style in financial markets in western developed countries. Compared with conventional investment, socially responsible investing realizes not financial performance, but also social performance and environmental performance. So, more and more investors invest their money in socially responsible investing. And the studies on socially responsible investing has changed from focusing on the comparison of financial performance between conventional investing and socially responsible investing to the more important effect of SRI—the effect of SRI on corporate behavior, and encouraging corporate to commit social responsibility. At present, both academic study and practice of socially responsible investing are in stating phase in China. Academic research focuses on the introduction of SRI, its conception, history, current situation in western developed countries and theirs' successful experiences. In practice, there are few socially responsible investing funds in Taiwan and Hong Kong and only one mutual fund in mainland intending to support those companies which invest in socially responsibility and environmental protection. So, the study of socially responsible investing and its effect on corporate behavior helps to current theory as well as practical significance of encouraging China to develop SRI.The thesis introduces detailed analysis into five factors: (1) studying Chinese and foreign literatures of the socially responsible investors, its financial performance and the effect on corporate behavior, we comb the related researches concerning with these issues. (2)introducing the current situation of SRI in western developed countries and their successful experiences. (3) comparing conventional investing and socially responsible investing from investor, investment manners and financial performance. (4)studying on the effect of SRI on corporate behavior from two perspectives. The first perspective—capital theory, establishing theoretical model to study on the effect of screening SRI on company's share price in financial market and then affect corporate behavior. The second perspective—corporate theory, focusing on the important stakeholder- shareholder, studying on how shareholder effect corporate decision from corporate governance by shareholder advocacy, thus promoting corporate to commit social responsibility. The conclusions are: screening socially responsible investing can affect corporate behavior under a certain condition; shareholder also can affect corporate decision through shareholder advocacy, and help corporate to commit social responsibility more active. (5)through a survey of Chinese institutional investors treating SRI, we try to analyze the practice of SRI in China.