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Annual Conference

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Accounting

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May 2024

We study how socially responsible investors (SRIs) affect information incorporation in price. We find that a higher level of socially responsible institutional ownership results in a lower level of informativeness of current returns on future earnings. Using an exogenous shock to SRI ownership, we s...
Keywords: Socially responsible investors, ESG preference, Future earnings response coefficient (FERC), Future ESG response coefficient, information processing
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