Publication Type
Journal Article
Version
acceptedVersion
Publication Date
5-2014
Abstract
Using alcohol, tobacco, and gaming consumption data and people’s attitudes toward these sin products to proxy for social norm acceptance levels, we show a strong interaction effect between social norms and financial incentives, which significantly influence the behavior of market participants. Specifically, institutional investors’ shareholdings and analyst coverage of sin companies increase with the degree of social norm acceptance. The association between shareholdings/coverage and social norm acceptance is less pronounced for firms with higher future expected performance. Our results show that social norms and financial incentives have a powerful interaction effect in determining the behavior of market participants, suggesting that social norms can be crossed when motive and opportunity exist
Keywords
Social norms, financial incentives, sin stocks
Discipline
Accounting | Portfolio and Security Analysis
Research Areas
Financial Performance Analysis
Publication
Accounting, Organizations and Society
Volume
39
Issue
4
First Page
289
Last Page
307
ISSN
0361-3682
Identifier
10.1016/j.aos.2014.04.001
Publisher
Elsevier
Citation
LIU, Yanju; LU, Hai; and VEENSTRA, Kevin.
Is Sin Always a Sin? The Interaction Effect of Social Norms and Financial Incentives on Market Participants’ Behavior. (2014). Accounting, Organizations and Society. 39, (4), 289-307.
Available at: https://ink.library.smu.edu.sg/soa_research/1263
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.aos.2014.04.001