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The information search process of socially responsible investors
Umeå University, Faculty of Social Sciences, Umeå School of Business.
Umeå University, Faculty of Social Sciences, Umeå School of Business.
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2010 (English)In: Journal of Financial Services Marketing, ISSN 1363-0539, E-ISSN 1479-1846, Vol. 15, no 1, 5-18 p.Article in journal (Refereed) Published
Abstract [en]

Largely fuelled by an increasing social and ethical concern among private investors, socially responsible investment (SRI) has, in many ways, gone from having a marginal role to becoming a ‘mainstream’ financial service in recent years. SRI is an investment process that, in addition to the ‘traditional’ financial objective of investment, also uses social, ethical or environmental (SEE) criteria when making investment decisions. However, despite the growth of the market for SRI profiled mutual funds, very little research has been carried out with the objective of understanding the decision-making process of private SR-investors. In order to address this gap in the literature, this article addresses one stage in the SR-investor decision-making process: consumer pre-purchase information search. Using a sample of 369 SR-investors, the results of the study indicate that SR-investors search more for SEE information, such as the criteria used for exclusion of stocks than for ‘regular’ financial information such as past financial return and level of risk. Moreover, the study also indicates that involvement and perceived knowledge with regard to both financial and SEE issues impact the nature of the information search process of private SR mutual fund investors.

Place, publisher, year, edition, pages
Hampshire, United Kingdom: Palgrave MacMillan , 2010. Vol. 15, no 1, 5-18 p.
Keyword [en]
Socially Responsible Investment; Ethical Investment; Information Search; Private Investors; Mutual Funds
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:umu:diva-34372DOI: 10.1057/fsm.2010.5OAI: oai:DiVA.org:umu-34372DiVA: diva2:321011
Available from: 2010-05-28 Created: 2010-05-28 Last updated: 2017-12-12Bibliographically 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.
Series
Studier i företagsekonomi. Serie B, ISSN 0346-8291 ; 73
Keyword
Consumer decision making, complex decision making environments, socially responsible investment, ethical investment, mutual funds, private investment
National Category
Business Administration
Research subject
Business Studies
Identifiers
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)
Opponent
Supervisors
Available from: 2010-08-27 Created: 2010-08-25 Last updated: 2011-11-07Bibliographically approved

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