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 social stock indices. It finds that adding a stock does not significantly change its market price, but deletions are associated with negative cumulative abnormal returns in the short term, which can reach -14% six months post-event. Furthermore, trading volumes for deleted stocks increase on the event date, and the operational performance of these firms deteriorates after removal from the social index.