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Cited by 7Corporate Social Responsibility ReportingFinancial Markets and Investment StrategiesSustainable Finance and Green Bonds

Inertia and discounting in the selection of socially responsible investments

Auger, Pat, Devinney, Timothy, Dowling, Grahame, Eckert, Christine·2016·Annals in Social Responsibility
DOI 10.1108/asr-07-2016-0006
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Abstract

Purpose: Socially responsible investment (SRI) funds have grown dramatically as an investment alternative in most of the developed world. The paper aims to discuss this issue. Design/methodology/approach: This study uses a structured experimental approach to determine if the decision-making process of investors to invest in SRIs is consistent with the process used for conventional investments. The theoretical framework draws on two widely studied concepts in the decision making and investment literature, namely, inertia and discounting. Findings: The authors find that inertia plays a significant role in the selection of SRI funds and that investors systemically discount the value of SRIs. Research limitations/implications: The results suggest that SRIs need to be designed to cater to the risk/return profiles of investors and that these investors need to be better informed about the performance of SRIs vs conventional investments to reduce their systematic discounting. Originality/value: Unique experimental approach applied to investment alternatives in a manner that captures individual level variation.

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Authors
Auger, P., Devinney, T., Dowling, G., & Eckert, C.
Affiliations
  • The University of Melbourne (AU)
  • University of Leeds (GB)
  • University of Technology Sydney (AU)
ORCID
Venue
Annals in Social Responsibility
Publisher
Emerald
Published
2016-05-03
Volume
2
Issue
1
Pages
29-47
ISSN
  • 2056-3515 (ISSN-L)
  • 2056-3523
DOI
10.1108/asr-07-2016-0006
OpenAlex
W2560016530
Cited by
7
References
30
Citations by year
2023: 1 · 2022: 1 · 2021: 2 · 2020: 3
FWCI
0.00
Type
journal article
Language
en
Open access
closed
Locations
Annals in Social Responsibility (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
  • Social Sciences › Economics, Econometrics and Finance › Finance › Sustainable Finance and Green Bonds
Keywords
socially responsible investment, SRI funds, discounting, investment decision-making, risk-return profile, investor information, behavioral finance

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