Outside of direct ownership, the general public may feel it is an implicit stakeholder of a firm. As the public becomes more vested in a firm’s actions, the firm may be more likely to engage in Corporate Social Responsibility (CSR) activities. We proxy for the public’s stake in a firm with public visibility. Based on 3400 unique newspaper publications from 1994–2008, we measure visibility for the S&P 500 firms with the frequency of print articles per year concerning the firm. We find that visibility has a signficant, positive relationship with the CSR rating. Evidence also suggests this relationship may be causal and working in one direction, from visibility to CSR. While the existing literature provides other factors that influence CSR, visibility proves to have the most significant impact when tested alongside those other factors. Visibility also has a mediating effect on the relationship between CSR rating and firm size. CSR rating and firm size relate negatively for the lowest visibility firms and positively for the highest. This paper provides strong evidence that visibility is an important factor to consider for studies on corporate social performance. Full article

Given that sustainable investing constitutes a major force across global financial markets, in 2016 Morningstar began reporting Morningstar Sustainability scores. We used the 2016, 2017 and 2018 scores to study the effects of socially responsible investments (SRI) on European equity fund performance. Sustainability scores impacted positively on performance, which was consistent with the idea that the mutual funds invested in companies with better scores generate better risk-adjusted and not-risk adjusted performance. We also tested the relation on mutual fund flows and risk. The sustainability score in the previous year is significant on the flows, so higher-rated funds receive a larger volume of funds. In terms of risk, the level of sustainability is negatively related to the value at risk (VaR) of the fund, supporting that higher scored mutual funds offer better protection against extreme losses. Full article

Traditionally, in the area of production and operations management, the financial states and decision-makers’ behaviour regarding loss have been ignored in the supply chain, which may lead to infeasible or unrealistic practices or even catastrophic losses in practical supply chain operations. Therefore, this study aims to provide a model for operational efficiency in a financially constrained supply-chain system consisting of a financially deficient retailer, a supplier, and a bank, and to analyse the impact of the behaviour of the bank and the supplier on the operational decision. It is assumed that the bank provides a loan to the retailer considering the supplier’s credit guarantee for the retailer. The supplier’s credit guarantee implies that, if the retailer goes bankrupt after the sales season, then a pre-guaranteed proportion of the retailer’s loan is repaid by the supplier. Moreover, to capture the decision-makers’ behaviour regarding loss, it is assumed that the supplier and the bank are loss-averse in their risk preference on the final profit. Under this circumstance, it is intended to draw the theoretical implications by analysing a loss-averse behaviour model for a supplier and a bank, in which a kinked piecewise linear and concave utility function is considered. The optimal decision is analytically derived for the retailer (the optimal order quantity), the supplier (the optimal wholesale price), and the bank (the optimal interest rate). In addition, a sensitivity analysis is conducted to investigate how the model parameters affect the optimal decision for the retailer, the supplier, and the bank under different degrees of loss-aversion. The optimal decisions are shown to be highly affected by the degree of the loss-aversion coefficient of the bank and the supplier and to be more conservative than the result in the traditional case which optimises the risk-neutral expected profit (the unit degree of loss-aversion). The analytical results can be summarised as follows. First, as the wholesale price and the interest rate increase, the optimal order quantity decreases. Second, the more loss-averse the supplier is, the higher the optimal wholesale price that is offered to the retailer by the supplier. Third, the larger the credit guarantee that is provided to the retailer by the supplier, the higher the optimal wholesale price that is provided to the retailer. Fourth, the more loss-averse the bank is, the higher the interest rate that is offered to the retailer; and the larger the credit guarantee that is provided by the supplier, the lower the interest rate that is offered to the retailer. Full article

The debate about the role of corporations with regard to water also involves the influence that paying returns to shareholders could have on the investment policy of utilities, influencing the development of new infrastructure or the renewal of existing ones. This study investigated the dividend policy of water utilities by analyzing the data of 128 Italian firms during 2009–2014. Data show that the majority of utilities do not distribute any return to shareholders. On average, large utilities pay more frequent returns than medium-sized and small ones. Moreover, water utilities that are part of a group, multi-utilities, and those located in the center of Italy pay more frequent returns than do others. Southern firms usually do not pay returns. As expected, privately owned water utilities pay dividends more frequently and have higher returns to equity. In all the observed years, at least one-third of such utilities paid returns. Empirical results provide water regulators, water utility managers, and stakeholders with information that can impact future regulatory and managerial decisions related to management and strategic model choices in the water industry and how these decisions affect investments to improve water quality, water quantity, and/or water services. Full article

Business models for sustainability (BMfS) are relevant topics on research agendas, given their orientation toward sustainability issues. However, traditional versions of these models are often ill-equipped at solving complex social problems. Cross-sector partnerships for sustainability (CSPfS) have been recognized as a new paradigm that mitigates the failure of traditional models. Impact investing, and social impact bonds (SIBs) in particular, represent an interesting field of research in innovative business models for sustainable finance, even though the literature does not consider SIBs within this broader field. We propose an exploratory study based on qualitative methods aimed at conceptualizing SIBs within the framework of BMfS and understanding how SIB collaboration varies across social sectors and geographical areas. Our study identifies three different models of SIBs characterized by the different degrees of collaboration between actors: (i) SIB as a fully collaborative partnership; (ii) SIB as a low-collaborative partnership; and (iii) SIB as a partially collaborative partnership. Our findings are useful to policy makers and practitioners involved in the SIB design, suggesting that a fully collaborative SIB model may stand a better chance of achieving the expected social impacts. Full article

Mobile financial services such as M-PESA in Kenya are said to promote inclusion. Yet only 7.6 per cent of the Kenyans in the 2013 Financial Inclusion Insights dataset have ever used an M-PESA account to save for a future purchase. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively, respondents who do not have access to a SIM card, have access to a SIM but do not have an M-PESA account, and, finally, have an account but do not save on it. We find that those who are excluded in the early stages are predominantly poor, non-educated, and female. For the final stage, we find that those who are in a position to save on their phone—the phone owners, the better educated—are less likely to do so. These results go against the traditional optimistic discourse on mobile savings as a prime path to financial inclusion. As such, our findings corroborate qualitative research that indicates that Kenyans have other needs, and want their money to circulate and ‘work’. Full article

The aim of this paper is to investigate whether terrorism is one of the important determinants affecting the investment decisions of foreign investors in tourism on a panel of 50 countries over the period 2000 to 2016. In addition to terrorism, the importance of three other theoretically significant determinants of attracting foreign direct investment (FDI) in tourism are explored—the previous level of FDI in tourism, the level of GDP and the international tourist arrivals. To obtain more reliable research results, the initial model is extended with certain control variables. The study uses system-GMM estimator for dynamic panel data models. The research results of a narrower and a wider model indicate that terrorism has no significant effect on the FDI inflow in tourism while international tourist arrivals significantly affect the future FDI in tourism in both models. Furthermore, the research results entail certain political connotations. In order to attract foreign investors in tourism, the most important factor is to ensure a stable macroeconomic environment with a competitive position in the Doing Business list and what better business conditions. Attention should also be focused on the security and preventive counter-terrorism, which will ensure that potential destinations reflect confidence, have a growth rate of tourist arrivals and, consequently, attract foreign investors. Full article

This paper aims to propose a financial framework based on mezzanine-type debt for financing Sustainable Infrastructure Systems (SIS). In our analysis, an exploratory-type methodology based on a post-positivist approach for describing the financial eco-innovation in the sustainable infrastructure context is used and consequently, the essential framework’s theory is developed, as well as the characteristics and schemes for its functioning. Moreover, the theoretical foundations of financial eco-innovations are analyzed. It was concluded that researchers could benefit from this framework by acquiring a better knowledge of how a mezzanine-debt type could work together sustainability criteria. This paper is expected to contribute to expanding the existing knowledge and expanding funding knowledge frontiers for SIS, as well as contributes to providing a foundation for new research topics. The originality of the proposed framework is intended to establish new ways in order to close the gap between the development of SIS and financing sources using the incorporation of sustainability criteria in the financing process. Thus, the importance of this work is based on the fact that it can be used as an academic support for producing practical solutions. Full article

Blockchain is highly secure in design and can hand huge data efficiently. A smart contract, based on a blockchain, can automate the entire process and make the contract self-executing in nature. Since the first introduction of these technologies in the 1990s, they have been at the center interest for academia and industry. Numerous researchers and practitioners have investigated the principles and usage of blockchain and smart contracts. However, little is coincidental regarding estimating the consumer’s additional willingness to pay (WTP) and analyzing the relationship with socio-economic characteristics of the consumer for blockchain and smart contracts in the insurance sector. This study conducted the survey on 1000 heads of the household or homemakers who represent population well in South Korea and estimated additional WTP using one-and-one-half-bounded dichotomous choice contingent valuation (OOHB DC CV) method. About 65% of sample respondents answered they are willing to pay some additional premium for blockchain and smart contracts. The mean WTP has the value of KRW 28,425.43 (USD 25.38) and the median WTP is KRW 16,111.71 (USD 14.39). Those with high incomes, high education and more insurance contracts are more likely to pay extra for insurance policies using blockchain and smart contracts. Considering the total number of households in South Korea, the aggregated additional WTP is about 8 percent of the net income of the insurance industry in fiscal year of 2017. Consequently, strategic development of insurance products using block chains and smart contracts targeting educated consumers with high-income will increase the number of policyholders, which can in turn increase premium revenues. Full article

In Italy, the dramatic reduction of government incentives has caused a decrease of investments in the renewable energy sector. For this reason, it is necessary to rethink funding techniques, extending the analysis to different cultural and financial models. In this paper, we study the incentive-dependency of an Italian case study in the wind energy sector in order to reach grid parity, comparing the obtained results with those of Islamic finance and conventional finance. In particular, we propose that Sukuk Islamic finance instruments be used for the realization of real assets in Shari’ah-compliant finance that prohibits interest rates, as in conventional financial markets, and we present the building cost thresholds necessary to achieve grid parity. Our results highlight the importance of incentives and the applicability of the use of Sukuk instruments for sustainable investments in the wind energy sector, which is crucial in the framework of current efforts against climate change as well as efforts to reduce greenhouse gas emissions. Full article