It’s a Matter of Principle: The Role of Personal Values in Investment Decisions

Pasewark, William R.; Riley, Mark E.

doi:10.1007/s10551-009-0218-6

Cited by 138 publications

(86 citation statements)

References 37 publications

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“…While Nilsson (2008) and Brimble et al (2013) conclude that financial performance and risk are the most influential factors in any investment choice for both conventional and SR investors, several studies indicate that investment decisions appear to be influenced by non-monetary or ethical objectives as well. In a controlled experimental setting, Pasewark and Riley (2010) find that investors appear to be sensitive equally to financial and to nonfinancial factors in the investment decision process. This implies that the investment decision is significantly driven by both the interaction between differences in financial performance and the investors' personal values.…”

Section: Introductionmentioning

confidence: 92%

“…However, several studies suggests that investment decisions appear to be not only determined by these financial considerations, but also by non-financial aims (e.g., Pasewark and Riley 2010;Pérez-Gladish et al 2012). Lewis and Mackenzie (2000a) report that the preferences for ethical investments are price inelastic with respect to losses and elastic with respect to gains.…”

Section: The Non-financial Utility and The Optimal Proportionmentioning

confidence: 99%

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Which proportion of SR investments is enough? A survey-based approach

Dorfleitner

Nguyen

2016

Bus Res

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This article examines the determinants of the optimal percentage that private investors seek to invest in a socially responsible (SR) way when forming their portfolio. By conducting a global online survey in English, German and French, we find indications that it is sufficient for the majority of investors to have a certain amount of their budget invested sustainably. Accordingly, the optimal proportion tends to be lower the higher the available investment volume is. In addition, the non-financial utility derived from SR investments appears to be independent of the form of financing the investor provides. Moreover, the results show that well-educated women and slightly younger persons seek to invest a higher percentage of their portfolio socially responsibly.

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Section: Introductionmentioning

confidence: 92%

Section: The Non-financial Utility and The Optimal Proportionmentioning

confidence: 99%

Which proportion of SR investments is enough? A survey-based approach

Dorfleitner

Nguyen

2016

Bus Res

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“…Because investors pursue long-term financial goals with their investments (Jansson and Biel 2011;Wärneryd 2001), they should be interested in the degree to which catering to nonshareholding stakeholders' interests can sustainably increase companies' future success. This interest is reflected by the growing rates of investors making socially responsible investments (Pasewark and Riley 2010;Peifer 2014). Accordingly, when the perceived sustainability of fulfilling non-shareholding stakeholders' interests for corporate success is high, investment intentions should be higher when companies prefer the interests of non-shareholding stakeholders over those of shareholding ones.…”

Section: The Moderating Role Of Perceived Sustainability For (Potentimentioning

confidence: 99%

“…First, we used scenario studies to test our hypotheses because they allow for analyzing the factors that drive individuals' investment decisions in a controlled setting (Ackert and Church 2006). This approach is common in studies examining factors that affect individual investors' decisionmaking (Barreda-Tarrazona et al 2011;Clark-Murphy and Soutar 2004;Hofmann et al 2008;Pasewark and Riley 2010;Schwarzkopf 2006). Moreover, it is important for enhancing clarity about the specific factors influencing individuals' investment decisions, as these have so far largely remained a ''black box'' (Schijven andHitt 2012, p. 1250) due to the database methodologies predominantly employed in previous research.…”

Section: Limitations and Opportunities For Future Researchmentioning

confidence: 99%

Investors’ reactions to companies’ stakeholder management: the crucial role of assumed costs and perceived sustainability

Schwarzmüller

Brosi

Stelkens³

et al. 2016

Bus Res

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Companies regularly have to address opposing interests from their shareholding and non-shareholding stakeholder groups. Consequently, a wealth of previous research has focused on how CEOs decide which stakeholder management activities to pursue and prioritize. In contrast, however, surprisingly little research has considered how (potential) investors react to a company's management of shareholding and non-shareholding stakeholders and what factors drive their reactions in such contexts. We seek to fill this gap in the literature by conducting an experimental scenario study (N = 997) in which investment behavior is analyzed in situations in which management has to make a trade-off between shareholders' and non-shareholding stakeholders' interests. Our results show that (potential) investors consider the assumed costs of fulfilling non-shareholding stakeholders' interests and the perceived sustainability of doing so for corporate success when making investment decisions in such contexts. In cases of low costs or high sustainability, participants were more willing to invest in a company that favored nonshareholding over shareholding stakeholders (thereby deciding against their immediate financial interests), while the opposite was true in cases of high costs or low sustainability. With these results, our paper broadens stakeholder theory's focus by taking individual investors' reactions to corporate stakeholder management into account. Moreover, it both provides evidence for and extends the ''Enlightened & Tanja Schwarzmüller

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“…Cowton (1994) finds that 87% of the individual investors participating in the 'Friends Provident NM Conscience Pension Fund' did so because of the fund's ethical investment policy, while only 7% mentioned financial reasons and motivations. Pasewark and Riley (2010) concludes that for individual investors concerned with negative societal side effects of company behaviour, financial criteria play a smaller role in their investment decisions. Michelson et al (2004) also conclude that individual SRI investors are especially motivated by their personal values, their desire for social change and the 'feel good' factor.…”

Section: Motivations Of Sri Investorsmentioning

confidence: 99%

The effectiveness of socially responsible investment: a review

Wagemans

Koppen

Mol

2013

Journal of Integrative Environmental Sciences

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Over the past two decades, an increasing number of shareholders have begun to consider non-financial criteria, such as social and environmental criteria, in making investment decisions and executing shareholders rights. Investing based on such criteria is often labelled socially responsible investment (SRI). This article reviews the actors in SRI, the motives for SRI, relevant theoretical frameworks and the effectiveness of SRI in changing environmental, social and corporate governance (ESG) performance of public companies. Various actors with different motives engage in SRI through distinct strategies. Although the effects of SRI strategies are difficult to identify and quantify, overall, SRI does not yet play a major role in changing ESG performance. Several factors can be identified that impede SRI in improving ESG performance, together forming an action agenda for SRI researchers and practitioners. The research agenda for SRI studies should include examining poorly studied engagement strategies; identifying the factors that govern SRI effectiveness; elucidating the relationship between shareholders and other actors, such as NGOs, governments and media; and building theoretical frameworks to understand and analyse SRI, for which the theory of stakeholder salience and ecological modernisation theory provide promising starting points.

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It’s a Matter of Principle: The Role of Personal Values in Investment Decisions

Abstract: investment, personal values, socially responsible investing,

Cited by 138 publications

References 37 publications

Which proportion of SR investments is enough? A survey-based approach

Which proportion of SR investments is enough? A survey-based approach

Investors’ reactions to companies’ stakeholder management: the crucial role of assumed costs and perceived sustainability

The effectiveness of socially responsible investment: a review

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