Jenke ter Horst
Professor, Tilburg University
j.r.terhorst@uvt.nl

Research Area:
Portfolio management; hedge funds; socially responsible investing; investor behavior

Jenke ter Horst is a professor of finance and vice-dean of Education at Tilburg University. He has a broad publication of articles such as in Journal of Financial Intermediation, Journal of Financial and Quantitative Analysis, Journal of Banking and Finance, and Financial Analyst Journal. Furthermore, he also contributed a chapter of books such as 'Socially responsible investment funds' in The Gower Handbook of Corporate Governance and Social Responsibility (2008), 'Incorporating Estimation Risk in Optimal Portfolios' with in Advances in Corporate Finance and Asset Pricing.


Stakeholder relations and stock returns: on errors in investors' expectations and learning

Abstract
Many institutional investors publicly state the belief that corporate stakeholder relations are associated with firm value in a manner the financial market fails to understand. We investigate whether stakeholder information predicted risk-adjusted returns due to errors in investors' expectations and ceased to do as attention increased. We build a stakeholder-relations index (SI) for U.S. firms over the period 1992-2009 and provide evidence that SI explained errors in investors' expectations about firms' future earnings. SI was positively associated with risk-adjusted returns, earnings announcement returns, and errors in analysts' earnings forecasts. However, as attention for stakeholder issues increased, these relationships diminished considerably.

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