Return premiums of sustainable companies listed on the Spanish stock market

The purpose of this paper is to analyze whether companies with a greater commitment to corporate social responsibility (SRI companies) perform differently on the stock market compared to companies that disregard SRI. Over recent years, this relationship has been taken up at both a theoretical and practical level, and has led to extensive scientific research of an empirical nature involving the examination of the relationships existing between the financial and social, environmental and corporate governance performance of a company and the relationship between SRI and investment decisions in the financial market. More specifically, this work provides empirical evidence for the Spanish market as to whether or not belonging to a group of companies the market classes as sustainable results in return premiums that set them apart from companies classed as conventional, and finds no differences in the stock market performance of companies considered to be SRI or conventional.

Interest rate exposure of Spanish banks: A nonparametric analysis

Interest rate risk is one of the major financial risks faced by banks due to the very nature of the banking business. The most common approach in the literature has been to estimate the impact of interest rate risk on banks using a simple linear regression model. However, the relationship between interest rate changes and bank stock returns does not need to be exclusively linear. This article provides a comprehensive analysis of the interest rate exposure of the Spanish banking industry employing both parametric and non parametric estimation methods. Its main contribution is to use, for the first time in the context of banks’ interest rate risk, a nonparametric regression technique that avoids the assumption of a specific functional form. One the one hand, it is found that the Spanish banking sector exhibits a remarkable degree of interest rate exposure, although the impact of interest rate changes on bank stock returns has significantly declined following the introduction of the euro. Further, a pattern of positive exposure emerges during the post-euro period. On the other hand, the results corresponding to the nonparametric model support the expansion of the conventional linear model in an attempt to gain a greater insight into the actual degree of exposure.

Idiosyncratic risk really drives stock returns; Spanish evidence

Following the theoretical model of Merton (1987), we provide a new perspective of study about the role of idiosyncratic risk in the asset pricing process. More precisely, we analyze whether the idiosyncratic risk premium depends on the idiosyncratic risk level of an asset as well as the vatriation in the market-wide measure of idiosyncratic risk. As expected, we obtain a net positive risk premium for the Spanish stock market over the period 1987-2007. Our results show a positive relation between returns and individual indiosyncratic risk levels and a negative but lower relation with the aggregate measure of idiosyncratic risk. These findings have important implications for portfolio and risk management and contribute to provide a unified and coherent answer for the main and still unsolved question about the idiosyncratic risk puzzle: whether or not there exists a premium associated to this kind of risk and the sign for this risk premium.

Letter names and sounds: their implications for the phonetisation process

Our aim was to analyse the impact of the characteristics of words used in spelling programmes and the nature of instructional guidelines on the evolution from grapho-perceptive writing to phonetic writing in preschool children. The participants were 50 5-year-old children, divided in five equivalent groups in intelligence, phonological skills and spelling. All the children knew the vowels and the consonants B, D, P, R, T, V, F, M and C, but didn’t use them on spelling. Their spelling was evaluated in a pre and post-test with 36 words beginning with the consonants known. In-between they underwent a writing programme designed to lead them to use the letters P and T to represent the initial phonemes of words. The groups differed on the kind of words used on training (words whose initial syllable matches the name of the initial letter—Exp. G1 and Exp. G2—versus words whose initial syllable is similar to the sound of the initial letter—Exp. G3 and Exp. G4). They also differed on the instruction used in order to lead them to think about the relations between the initial phoneme of words and the initial consonant (instructions designed to make the children think about letter names—Exp. G1 and Exp. G3 —versus instructions designed to make the children think about letter sounds—Exp. G2 and Exp. G4). The 5th was a control group. All the children evolved to syllabic phonetisations spellings. There are no differences between groups at the number of total phonetisations but we found some differences between groups at the quality of the phonetisations.

Spanish society's perceptions about socially responsible investing

The debate surrounding the financial needs of investors and the impact on society of investment is considered to be an important research topic due to the growth of socially responsible financial markets. The objective of this research is to study the perception of the Spanish public about socially responsible investing (SRI) criteria and real-life investment needs. To examine the Spanish perception of SRI, we conducted a field survey. The results show that SRI is in an early stage and Spanish investors need more exact information regarding social, environmental, and governance criteria in order to invest in socially responsible companies and products.