Title

Understanding Socially Responsible Investing: The Effect of Decision Frames and Trade-off Options

Department/School

Ethics and Business Law

Date of this version

2009

Document Type

Article

Keywords

corporate social responsibility, decision framing, decision making, investor behavior, investor cognition, social reporting, socially responsible investing

Abstract

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.

Published in

Journal of Business Ethics

Citation/Other Information

Glac, K. “Understanding socially responsible investing: The effect of decision frames and trade-off options”, Journal of Business Ethics, 87, 2009, pp. 41-55.