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Investment with a conscience: Examining the impact of pro-social attitudes and perceived financial performance on socially responsible investment behavior
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2008 (English)In: Journal of Business Ethics, ISSN 0167-4544, E-ISSN 1573-0697, Vol. 83, no 2, 307-325 p.Article in journal (Refereed) Published
Abstract [en]

This article addresses the growing industry of retail socially responsible investment (SRI) profiled mutual funds. Very few previous studies have examined the final consumer of SRI profiled mutual funds. Therefore, the purpose of this study was to, in an exploratory manner, examine the impact of a number of pro-social, financial performance, and socio-demographic variables on SRI behavior in order to explain why investors choose to invest different proportions of their investment portfolio in SRI profiled funds. An ordinal logistic regression analysis on 528 private investors revealed that two of the three pro-social variables had a positive impact on how much the consumer invested in SRI profiled funds. Moreover, there was proof of a non-altruistic motive for investing in SRI as consumers who perceive that financial return of SRI is equal or better than “regular” mutual funds, invested a greater proportion of their portfolio in SRI profiled mutual funds. Furthermore, the results showed that women and better-educated investors were more likely to invest a greater proportion of their investment portfolio in SRI. Overall, the findings indicate that both financial perceptions and pro-social attitudes are connected to consumer investment in SRI.

Place, publisher, year, edition, pages
Springer , 2008. Vol. 83, no 2, 307-325 p.
Keyword [en]
consumer investment behavior, mutual funds, private investors, pro-social attitudes, socially responsible investment
National Category
Economics and Business
URN: urn:nbn:se:umu:diva-10936DOI: 10.1007/s10551-007-9621-zOAI: diva2:150607
Available from: 2008-11-06 Created: 2008-11-06 Last updated: 2010-08-27Bibliographically approved
In thesis
1. Consumer decision making in a complex environment: Examining the decision making process of socially responsible mutual fund investors
Open this publication in new window or tab >>Consumer decision making in a complex environment: Examining the decision making process of socially responsible mutual fund investors
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

During the last few decades, "regular people" have become increasingly involved with investing in the stock market. One way of doing this, which has become more and more popular, is to invest in mutual funds. The mutual fund industry has, due to its explosive growth, been described as a success story of the 20th century. These days, sources report that over 70% of the Swedish population actively invests in mutual funds.

This thesis is an investigation into consumer decision making regarding one specific type of mutual fund: Socially Responsible Investment (SRI). SRI profiled mutual funds are different from "regular" mutual funds in that they incorporate social, ethical, and environmental (SEE) criteria. In this manner, SRI profiled mutual funds could be said to have two separate dimensions. The regular financial dimension has the purpose of generating a high level of financial return while managing risk. The socially responsible dimension, on the other hand, focuses on incorporating SEE issues into the investment process.

However, consumers that desire to choose mutual funds that will both perform well financially and have a good socially responsible dimension face a more difficult decision than consumers who choose to invest in "regular" mutual funds. As each of the dimensions come with its own set of challenges which the consumer must overcome, choosing an appropriate combination of these is a difficult task. In this manner, consumers of SRI profiled mutual funds have to navigate through a complex decision making environment to arrive at a good choice.

Based in this notion of decision making in complex environments, this thesis investigates how consumers combine their "traditional" financial objectives with their "additional" SEE consideration and examines the impact of personal factors related to these two areas on consumer investment in SRI profiled mutual funds. Four separate essays on these topics, each investigating a specific stage in the Engel-Kollat-Blackwell (1968) consumer decision making process, are presented. Moreover, in order to understand how complexity impacts consumer decision making in the area, the results of each study are analyzed against a conceptual framework focusing on the complexity of the market.

The results show that consumers of SRI profiled mutual funds care about both financial and SEE issues. However, how consumers combine these in their decision making differs. Factors, such as the stage of the purchase decision making process, personal abilities, preferences, and perceptions are found to impact consumer decision making.  Against this background, this thesis generates an increased understanding of consumer decision making in complex decision making environments in general and of SRI profiled mutual funds in particular.

Place, publisher, year, edition, pages
Umeå: Umeå School of Business, Umeå University, 2010. 108 p.
Studier i företagsekonomi. Serie B, ISSN 0346-8291 ; 73
Consumer decision making, complex decision making environments, socially responsible investment, ethical investment, mutual funds, private investment
National Category
Business Administration
Research subject
Business Studies
urn:nbn:se:umu:diva-35607 (URN)978-91-7459-035-7 (ISBN)
Public defence
2010-09-17, Samhällsvetarhuset, Hörsal B, Umeå universitet, Umeå, 13:15 (English)
Available from: 2010-08-27 Created: 2010-08-25 Last updated: 2011-11-07Bibliographically approved

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