Dr Ioannis Oikonomou
Dr Ioannis Oikonomou
- Associate Professor in Finance
- Director MSc in Behavioural Finance
Profile & Expertise
Ioannis joined the academic faculty of the ICMA Centre in 2011. He is the Programme Area Director for all ICMA Centre Undergraduate Programmes as well as for the MSc in Behavioural Finance. He is also the module convenor of the undergraduate Portfolio Management course and postgraduate Behavioural Finance course.In the past, he has worked at the Credit Extension Department of Citibank in Athens, Greece.
He holds a BSc in Banking and Financial Management from the University of Piraeus (Greece), an MSc in International Securities, Investment and Banking with a specialization in Trading and Asset Management and a PhD in Finance, both from the ICMA Centre.
In early 2012 Ioannis’s project, ‘Corporate Social Responsibility and Credit Costs’ was awarded a highly prestigious grant by the Centre for European Economic Research in Mannheim, Germany. The Strengthening Efficiency and Competitiveness in the European Knowledge Economies (or SEEK) grant is worth approximately €150,000 and aims to contribute to a deeper understanding of policy rationales, the design of appropriate policy instruments as well as their effectiveness and efficiency. READ MORE
Ioannis thesis, entitled ‘Empirical Investigations of the Relationship between Corporate Social and Financial Performance’, has been awarded the Best Thesis in Finance and Sustainability European Research Award for 2012. This award is administered by the French Social Investment Forum and the United Nations-backed Principles for Responsible Investment (PRI).
In 2013, Ioannis was awarded the University’s 2013 Best Research Output Prize for Henley Business School with his research paper “The Impact of Corporate Social Performance on Financial Risk and Utility: A Longitudinal Analysis”.
In 2015, his work on the connection between firm sustainability and the pricing of corporate bonds was honoured with the Outstanding Publication Award from the Financial Review academic journal.
His research on various issues in the relationship between corporate social responsibility and financial performance has been published in prestigious academic journals such as the Journal of Management Studies, Financial Management, Journal of Business Ethics and Financial Review. It has also been featured in international media, including French newspaper Le Monde, and specialised practitioner bulletins, such as the CFA Digest.
Ioannis has presented in several international conferences in the USA and Europe. He has also been a reviewer for diverse international academic journals including the Journal of Economic Behavior & Organization, European Financial Management, Journal of Banking and Finance, Journal of Business Ethics, Transportation Research Part E: Logistics and Transportation Review and Business Ethics: A European Review.
- June 2016: The paper “The Impact of Corporate Cultural Distance on Mergers and Acquisitions” won the best student corporate finance award in the 3rd Young Finance Scholar’s conference.
- March 2016: Received the Teaching Excellence Award administered by the Reading University Student Union and based entirely on student views and nominations. Was also nominated for the Personal Tutor Excellence Award.
- September 2015: The paper “The Impact of Corporate Social Responsibility on the Likelihood of Deal Completion and the Acquisition Method of Payment”, was runner-up for the best student paper award in the PRI Academic network conference 2015.
- April 2015: The paper “The Effects of Corporate Social Performance on the Cost of Corporate Debt and Credit Ratings” won the Outstanding Publication Award for a paper published in 2014 in the Financial Review journal.
- March 2013: Won the Henley Business School Best Research Output Prize for the paper “The Impact of Corporate Social Performance on Financial Risk and Utility: A Longitudinal Analysis”.
- September 2012: Doctoral thesis entitled “Empirical Investigations of the Relationship between Corporate Social and Financial Performance” was honoured with the Best Thesis in Finance and Sustainability European Research Award for 2012, administered by the French Social Investment Forum and the United Nations-backed Principles for Responsible Investment.
- Socially Responsible Investing
- Behavioural Finance
- Sports Finance
Key publications, books, research & papers
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The effects of environmental, social and governance disclosures and performance on firm value: a review of the literature in accounting and finance
This paper not only attempts to survey the burgeoning literature on environmental, social and governance disclosures and performance and their effects on firm value, but its focus also lies on highlighting stylised observations coming from the most recent work that has not yet become part of the ‘conventional wisdom’ in the field. In addition, it outlines some of the crucial knowledge gaps and interesting questions that have not, as of yet, been addressed and thus outlines a potential agenda for future research on socially responsible investing. Lastly, it introduces the papers published in this special issue of the British Accounting Review.
Socially responsible investment portfolios: does the optimization process matter?
This study investigates the impact of the choice of optimization technique when constructing Socially Responsible Investment (SRI) portfolios. Corporate Social Performance (CSP) scores are price sensitive information that is subject to considerable estimation risk. Therefore, uncertainty in the input parameters is greater for SRI portfolios than conventional portfolios, and this affects the selection of the appropriate optimization method. We form SRI portfolios based on six different approaches and compare their performance along the dimensions of risk, risk-return trade-off, diversification and stability. Our results for SRI portfolios contradict those of the conventional portfolio optimization literature. We find that the more “formal” optimization approaches (Black-Litterman, Markowitz and robust estimation) lead to SRI portfolios that are both less risky and have superior risk-return trade-offs than do more simplistic approaches; although they also have more unstable asset allocations and lower diversification. Our conclusions are robust to a series of tests, including the use of different estimation windows and stricter screening criteria.
A financial business case for corporate social responsibility
The shipping industry facilitates substantially the operation of a global supply network and plays a pivotal role in the global transport of products. Shipping positively affects the lives of billions of people, with 90% of the world’s international trade travelling by sea. The challenges of the sector are multiple due to the cyclical nature of the industry, the global political and economic instability, the bulk volume of environmental laws and the volatility of bunker fuel and freight rates. The international nature of the industry possesses significant challenges because regulations are usually taken in a global level and enforced on the local level in which there are various environmental and national peculiarities.
The effects of corporate and country sustainability characteristics on the cost of debt: an international investigation
We investigate the relationship between corporate and country sustainability on the cost of bank loans. We look into 470 loan agreements signed between 2005 and 2012 with borrowers based in 28 different countries across the world and operating in all major industries. Our principal findings reveal that country sustainability, relating to both social and environmental frameworks, has a statistically and economically impactful effect on direct financing of economic activity. An increase of one unit in a country’s sustainability score is associated with an average decrease in the cost of debt by 64 basis points. Our international analysis shows that the environmental dimension of a country’s institutional framework is approximately twice as impactful as the social dimension, when it comes to determining the cost of corporate loans. On the other hand, we find no conclusive evidence that firm-level sustainability influences the interest rates charged to borrowing firms by banks. Our main findings survive a battery of robustness tests and additional analyses concerning subsamples, alternative sustainability metrics and the effects of financial crisis.
Is there a gold social seal? The financial effects of additions to and deletions from social stock indices
This study investigates the financial effects of additions to and deletions from the most well-known social stock index: the MSCI KLD 400. Our study makes use of the unique setting that index reconstitution provides and allows us to bypass possible issues of endogeneity that commonly plague empirical studies of the link between corporate social and financial performance. By examining not only short-term returns but also trading activity, earnings per share, and long-term performance of stocks that are involved in these events, we bring forward evidence of a ‘social index effect’ where unethical transgressions are penalized more heavily than responsibility is rewarded. We find that the addition of a stock to the index does not lead to material changes in its market price, whereas deletions are accompanied by negative cumulative abnormal returns. Trading volumes for deleted stocks are significantly increased on the event date, while the operational performances of the respective firms deteriorate after their deletion from the social index.
The financial effects of uniform and mixed corporate social performance
Firms typically present a mixed picture of corporate social performance (CSP), with positive and negative indicators exhibited by the same firm. Thus, stakeholders’ judgements of corporate social responsibility (CSR) typically evaluate positives in the context of negatives, and vice versa. Building on social judgement theory, we present two alternative accounts of how stakeholders respond to such complexity, which provide differing implications for the financial effects of CSP: reciprocal dampening and rewarding uniformity. Echoing notable findings on strategic consistency, our US panel study finds that firms that exhibit uniformly positive or uniformly negative indicators in particular dimensions of CSP outperform firms that exhibit a mixed picture of positives and negatives, which supports the notion that stakeholders’ judgements of CSR reward uniformity.
The effects of corporate social performance on the cost of corporate debt and credit ratings
This study investigates the differential impact that various dimensions of corporate social performance have on the pricing of corporate debt as well as the assessment of the credit quality of specific bond issues. The empirical analysis, based on an extensive longitudinal data set, suggests that overall, good performance is rewarded and corporate social transgressions are penalized through lower and higher corporate bond yield spreads, respectively. Similar conclusions can be drawn when focusing on either the bond rating assigned to a specific debt issue or the probability of it being considered to be an asset of speculative grade.
Essentials of Investments
Bodie Z., Kane A., Marcus A., (2013) Essentials of Investments, 9th Global Edition, McGraw Hill
Contributions of exercises on the Capital Asset Pricing Model and Market Efficiency for “Essentials of Investments”
The impact of corporate social performance on financial risk and utility: a longitudinal analysis
This study focuses on the wealth-protective effects of socially responsible firm behavior by examining the association between corporate social performance (CSP) and financial risk for an extensive panel data sample of S&P 500 companies between the years 1992 and 2009. In addition, the link between CSP and investor utility is investigated. The main findings are that corporate social responsibility is negatively but weakly related to systematic firm risk and that corporate social irresponsibility is positively and strongly related to financial risk. The fact that both conventional and downside risk measures lead to the same conclusions adds convergent validity to the analysis. However, the risk-return trade-off appears to be such that no clear utility gain or loss can be realized by investing in firms characterized by different levels of social and environmental performance. Overall volatility conditions of the financial markets are shown to play a moderating role in the nature and strength of the CSP-risk relationship.
The Bond and Money Markets: Strategy, Trading, Analysis
Choudhry, M. (2003) The Bond and Money Markets: Strategy, Trading, Analysis, Butterworth-Heinemann publications
Contributions of text, exercises and other material in the forthcoming edition of “The Bond and Money Markets: Strategy, Trading, Analysis”