Publication Type

Journal Article

Version

Postprint

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

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.1016/j.aos.2014.04.001

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