Abstract A company’s moral behavior has an effect on its market capitalization. This is the conclusion reached by four researchers — including Augustin Landier, a professor at HEC Paris – who conducted an online experiment involving 750 participants. On average, the people surveyed said that they would be willing to pay .7 dollars extra per share to invest in a company that donated one dollar per share to philanthropic organizations. If, on the other hand, a company increased its dividends by “depriving” charities of a dollar per share, the investors would reduce their investment by .9 dollars per share. The study seems to prove that investors make decisions based on their values, and not only on their desire to make a profit.Jean-Francois Bonnefon, Augustin Landier, Parinitha Sastry, David Thesmar, Do Investors Care About Corporate Externalities ? Experimental Evidence, HEC Paris Research Paper No. FIN-2019-1350, September 23, 2019. Three questions for Augustin Landier, HEC professor of finance How did you obtain your results? This experiment was conducted via Mechanical Turk, a crowdsourcing platform run by Amazon where workers can be recruited to perform tasks virtually. The 755 participants, who were paid, had to respond to situations that pitted their financial gain against moral considerations. We designed this game to reflect the ethical dilemmas an investor might face. The goal was to see whether participants were ready to reduce their profits in order to invest in a company that demonstrated more exemplary behavior. Your study involved imaginary situations. Can the same conclusions […]

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