Do The Abu Dhabi Capital Market Value Sustainability?

  • Maitha Al Mutaiwei

Student thesis: Master's Thesis

Abstract

Does the Abu Dhabi Stock Market value corporate practice of sustainability? The answer to this question may critically help government officials and policy makers identify the policies to mobilize corporate practice of sustainability. In this thesis, we analyze if additional premium exists for stock prices of companies with sustainability practices. In particular, we use memberships of the Abu Dhabi Sustainability Group (ADSG), a voluntary reporting system based on the Global Sustainability Reporting Initiative (GRI), to distinguish companies with sustainable practice from those that do not. Statistical models that are grounded on the Capital Asset Pricing Model (CAPM) as well as the Arbitrage Pricing Model (APT) are then developed to test the hypothesis of the existence of a price premium for shares of ADSG companies with 10-year stock price data. The result shows no statistically significant premium in the Abu Dhabi Stock Market for companies with sustainable practices. Based on this, we provide recommendations to policy makers which can be used to induce a bias in sustainability investments.
Date of AwardDec 2016
Original languageAmerican English
SupervisorRita Sousa (Supervisor)

Keywords

  • Sustainable Practices
  • Sustainable Development
  • Capital markets
  • Stock Market value
  • Statistical Models
  • Capital Asset Pricing Model
  • Arbitrage Pricing Model
  • Abu Dhabi Stock Market
  • United Arab Emirates.

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