Abstract
In the present chapter, we conduct an event-driven test of the implementation of a Natural Protected Area Program (NPAP) and the status of being socially responsible either in the profits or in the stock price of public corporations traded in the Mexican Stock Exchange. By using a panel regression model with yearly data from 2014 to 2016 of 33 companies, we found that even though the socially responsible status and the benefits of implementing a NPAP in a company are not priced by investors, the adoption of a NPAP creates, on average, an extra 13.38% ROI. Following our results, we suggest the level of NPAP implementation in a country as a potential sustainability (environmental) indicator be measured in panel regressions in different countries and to use such indicator as a portfolio asset allocation factor.
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- 1.
We will not discuss the appropriateness of the term sustainability or social responsibility by the fact that this issue, in the investment area, is a term used to qualify a company with high social, ethical, or environmental standards in the asset allocation process. That is, SRI investors only focus on the aforementioned management standards in order to include the security of a company or not. A brief review of the history of socially responsible investment practice in the literature review section will give more insight of why sustainable investment and socially responsible investment are terms used indistinctly in this paper.
- 2.
Who invented NAPALM.
- 3.
That is the well-diversified investment strategy that includes securities of either socially responsible or non-socially responsible companies in the portfolio.
- 4.
We used the time fixed effects model for two reasons: (1) the number of years is 3, so the time series in each section or stock is small, leading to the next issue, and (2) there are 33 sections, and a 33 different values of α could lead to a non-feasible model in computational and mathematical terms.
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Espitia-Moreno, I.C., De la Torre-Torres, O.V., Martínez-Peña, D.G. (2018). Public Mexican Corporations’ Sustainability Indicators: Measuring the Profit Benefits of Protected Natural Areas Programs for Socially Responsible Investors. In: Ortega-Rubio, A. (eds) Mexican Natural Resources Management and Biodiversity Conservation. Springer, Cham. https://doi.org/10.1007/978-3-319-90584-6_5
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