insb. Energie- und Umweltmanagement
The 74th Annual Meeting of the Academy of Management - August 1-5, 2014 - Philadelphia, PATwo papers which Timo Busch has coauthored are presented at the conference
26. Mai 2014
How Media Visibility of Stakeholder Concerns Increases Firm Risk
This study examines the media visibility of stakeholder concerns and its effect on firm risk. Drawing on instrumental stakeholder theory, we argue that media visibility of stakeholder concerns increases firm risk by amplifying stakeholder power and urgency. Studying a large international sample of 413 firms, we show that media visibility of stakeholder concerns has a positive and significant effect on firm risk measured by credit default swap spreads. The study adds to the theoretical literature by highlighting the special status of the media within instrumental stakeholder theory. Empirically, this study proposes and tests a novel mechanism which complements the current understanding of the financial outcomes of stakeholder management.
Cognitive Barriers to the Engagement of Wealthy Private Investors in Sustainable Investing
The notion that sustainable investing (SI) has become a mainstream investment style is challenged by the observation that private investors appear substantially underrepresented in SI compared to institutional investors. This study empirically explores SI-barriers for private investors. We provide insights from interviews with High Net Worth Individuals (HNWIs), an economically highly significant yet secretive and thus little researched segment of private investors. Our results indicate substantial, individually different interest in SI amongst HNWIs, and propose three specific SI-barriers. The first barrier pertains to a perception-based information asymmetry. Investment advisors appear to misinterpret clients’ individually specific interest in SI. Barrier two relates to HNWIs’ perception of SI as limited to themes that are above-average volatile. This perception limits the engagement in SI in case of a short investment time horizon. Barrier three likewise relates the perception of SI as volatile to the effect of financial losses. We reflect on the observed significance of investors’ perceived volatility of SI, investment time horizon and financial losses by relating them to Prospect Theory. In sum, investors’ cognition of SI appears to be an important engagement reason that goes beyond the usual business-case-arguments and that deserves more attention in future research.
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