A Comparative Analysis Of Socially Responsible Investing For Borsa Istanbul Stock Market
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AbstractThe purpose ofthis study is to examine the stock market performance and accountingperformance of Participation 30 Index (KATLM), Corporate Governance Index(XKURY) and Sustainability Index (XUSRD), all of which are calculated by Borsa Istanbul(BIST) stock market. The companies in these indexes are approved as companiesmaking socially-responsible investments. Design/methodology/approach – Therisk-adjusted performance measures, Sharpe Ratio, Treynor Measure, JensenMeasure, Information Ratio, M2 Performance Measure and T2 Performance Measure were usedin this article to calculate the stock market performance. The return on assets(ROA) and return on equity (ROE) were used as accounting based performancemeasures. The results show that there is a positive relation between socialresponsibility and financial performance for companies in BIST. Research limitations/implications - BIST Sustainability Index hasstarted to be computed as of November 2014, and it is one of the limitations ofthis study. Practical implications – First, the shortage of investmentalternatives of companies covered within the context ethical finance is not adisadvantage for them. Second, Islamic Finance, which can be investigatedwithin the context of ethical finance, has become popular in recent years inTurkey. KATLM Index, which is consisted of stocks of the companies operatingcompatible with the principles of participation banking, is an alternative for risk averse investors. Originality/value - Turkish stock market is anemerging financial market. The findings of this study has implications forlocal and international investors for designing trading strategies, drawinginvestment decisions and risk management.