Investing in Frankenfirms: Predicting Socially Unacceptable Risks

摘要: When the public decides that a product or production process is socially unacceptable, share price of firms involved may suffer. The danger that, out distaste, peo ple will refrain from buying shares. But being able to assess de gree unacceptability can mean better how it affect firm’s profitability, and value firm. Over past twenty-five years, many psychological studies have considered predictors for one class industrial activities: those perceived as producing risks health, safety, environment. We compare results several risk perception conducted 1975–1994 with current consumer boycotts screening criteria re sponsible investment firms—two forms organized distaste. From both perspectives, high historic ratings on undesirable characteristics predicted orga nized aversion. These relationships are discussed in terms make more precise estimates direct indirect effects social price. One way pay critical attention financial disclosures such problems light concurrent state scientific knowledge. illustrate these issues case genetically modified organisms.