Angel and Rivoli (1997)

Angel, James, and Pietra Rivoli. "Does Ethical Investing Impose a Cost Upon the Firm? A Theoretical Examination." Journal of Investing, Winter, 1997.

Uses a framework from Merton [1987] to estimate the impact of a boycott on a firm's cost of capital. Argues that the impact will be small (< 0.5% per year) if as many as 65% of all investors boycott the shares, but that the cost will rise precipitously if additional investors boycott. Estimates a 3% cost if 90% of investors boycott. Argues that the impact of a boycott will be greatest on fast-growing firms.