Understanding Socially Responsible Investing: The Effect of Decision Frames and Trade-off Options
Ethics and Business Law
Date of this version
corporate social responsibility, decision framing, decision making, investor behavior, investor cognition, social reporting, socially responsible investing
Over the past two decades, the phenomenon of socially responsible investing has become more widespread. However, knowledge about the individual socially responsible investor is largely limited to descriptive and comparative accounts. The question of ‘‘why do some investors practice socially responsible investing and others don’t?’’ is therefore still largely unanswered. To address this shortcoming in the current literature, this paper develops a model of the decision to invest socially responsibly that is grounded in the cognition literature. The hypotheses proposed in the model are tested with an experimental survey. The results indicate that the framing of the investing situation influences the likelihood of engagement in socially responsible investing and how much return the individuals are willing to sacrifice when choosing socially responsible over conventional investments.
Journal of Business Ethics