Are green and socially responsible funds more efficient than conventional funds? A DEA approaches
ISSN: 0144-3585
Article publication date: 4 July 2023
Issue publication date: 16 February 2024
Abstract
Purpose
The main goal of this paper is better understand the risk/return trade-off of investing in socially responsible investment funds (SRIF) and green investment funds (GIF).
Design/methodology/approach
To achieve our aim a green investment fund portfolio, a socially responsible investment portfolio and a conventional fund (CF) portfolio from the United States of America (USA) were selected to compare the efficiency of these three different portfolios, by using Value-Based Data Envelopment Analysis (DEA) methodology.
Findings
The results point out that SRIF and GIF are more efficient than CF. For five years, the CFs have not outperformed the GIF.
Originality/value
The results suggest that there is a growing awareness on the part of investors that sustainable companies are the companies that will allow a better quality of life and a more sustainable environment. It seems that somehow managers and investors are aware that the market will compensate them for thinking about a cleaner and more equitable world.
Keywords
Acknowledgements
This work is supported by national funds, through the FCT – Portuguese Foundation for Science and Technology under project UIDB/04011/2020 and project UIDB/00308/2020.
Citation
Neves, M.E.D., Gouveia, M.d.C., Martins, A. and Costa Pinho, J.C.d. (2024), "Are green and socially responsible funds more efficient than conventional funds? A DEA approaches", Journal of Economic Studies, Vol. 51 No. 2, pp. 261-286. https://doi.org/10.1108/JES-12-2022-0677
Publisher
:Emerald Publishing Limited
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