Social identification and investment decisions

R.M.M.J. Bauer, P.M.A. Smeets*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

57 Citations (Web of Science)


This paper investigates the role of social identification in investment decisions. Social identity is an aspect of self-image based on in-group preferences and a perception of belonging to a social group. We collected survey data from retail clients of the only two banks in the Netherlands that exclusively offer socially responsible investment products and savings accounts. Our data show that almost half of the clients invest exclusively at these banks, whereas the other half also holds at least one conventional investment account. Clients vary widely in the extent to which they identify themselves with socially responsible investments (SRI). Investors with a strong social identification allocate substantially more of their wealth to these banks, both in terms of euros invested and in terms of percentage of their total portfolio invested. Social identification also mediates the effect of expected returns on SRI. Our results further show that social identification is stronger among highly educated, younger and low-wealth investors.

Data source: survey among ASN Bank and Triodos Bank clients
Original languageEnglish
Pages (from-to)121-134
Number of pages14
JournalJournal of Economic Behavior & Organization
Publication statusPublished - Sept 2015


  • Socially responsible investments (SRI)
  • Social identification
  • Mutual funds
  • Risk perceptions

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