Inertia and discounting in the selection of socially responsible investments: An experimental investigation

Auger, P; Devinney, T; Dowling, G; Eckert, C

Inertia and discounting in the selection of socially responsible investments: An experimental investigation

Auger, P Devinney, T Dowling, G

Eckert, C

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Publisher:: Emerald
Publication Type:: Journal Article
Citation:: Annals in Social Responsibility, 2016, 2 (1), pp. 29 - 47
Issue Date:: 2016-07-15

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Field	Value	Language
dc.contributor.author	Auger, P	en_US
dc.contributor.author	Devinney, T	en_US
dc.contributor.author	Dowling, G https://orcid.org/0000-0003-3055-5982	en_US
dc.contributor.author	Eckert, C https://orcid.org/0000-0002-8573-6978	en_US
dc.date.available	2020-05-25T19:28:01Z
dc.date.issued	2016-07-15	en_US
dc.identifier.citation	Annals in Social Responsibility, 2016, 2 (1), pp. 29 - 47	en_US
dc.identifier.issn	2056-3515	en_US
dc.identifier.uri	http://hdl.handle.net/10453/97773
dc.description.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.	en_US
dc.publisher	Emerald	en_US
dc.relation.ispartof	Annals in Social Responsibility	en_US
dc.relation.isbasedon	10.1108/ASR-07-2016-0006	en_US
dc.rights	This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here - https://dx.doi.org/10.1108/ASR-07-2016-0006. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.	en_US
dc.title	Inertia and discounting in the selection of socially responsible investments: An experimental investigation	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	2	en_US
utslib.for	1503 Business and Management	en_US
utslib.for	150299 Banking, Finance and Investment not elsewhere classified	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
utslib.copyright.status	open_access
pubs.consider-herdc	true	en_US
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	2	en_US

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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http://hdl.handle.net/10453/97773