Why do investors hold socially responsible mutual funds?

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

To understand why investors hold socially responsible mutual funds, we link administrative data to survey responses and behavior in incentivized experiments. We find that both social preferences and social signaling explain socially responsible investment (SRI) decisions. Financial motives play less of a role. Socially responsible investors in our sample expect to earn lower returns on SRI funds than on conventional funds and pay higher management fees. This suggests that investors are willing to forgo financial performance in order to invest in accordance with their social preferences.

Original languageEnglish
Pages (from-to)2505-2550
Number of pages46
JournalJournal of Finance
Volume72
Issue number6
DOIs
Publication statusPublished - Dec 2017

Keywords

  • LAB EXPERIMENTS
  • PREFERENCES
  • INCENTIVES
  • INVESTMENT
  • TRUST
  • FIELD
  • PERFORMANCE
  • ATTITUDES
  • TRUSTWORTHINESS
  • DETERMINANTS

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