The market valuation of ethical assets in S pain: an application of the hedonic pricing method

• Published in: Business ethics (Oxford, England) England), 2014-10, Vol.23 (4), p.343-363
• Main Authors: Bilbao‐Terol, Celia, Cañal‐Fernández, Verónica
• Format: Article
• Language: English
• ISSN: 0962-8770; 1467-8608
• DOI: 10.1111/beer.12055

The aim of this paper is to calculate the market valuation of non‐financial characteristics, namely, the social responsibility criteria (social, ethical and environmental) included in the S panish S ocially R esponsible I nvestment F unds. The hedonic price method is applied for this purpose. This method relates the price of S ocially R esponsible I nvestment F unds with both financial and social responsibility characteristics. Because of the large number of social responsibility characteristics included in these funds, prior to application of the hedonic price method, the principal components factor analysis technique is used. The data are taken from the prospectus for each fund and from the data provided by the N ational S ecurities M arket C ommission. Results indicate that the S panish market is sensitive to the social responsibility practices of companies. In particular, the market value practices related to environmental sustainability, the enforcement of labour rights, sustainable production and consumption and non‐abusive market practices.