Beyond preferences: Beliefs in sustainable investing

Year: 2024

Type: Journal Publication

Journal: Journal of Economic Behavior & Organization

Abstract

We investigate the effect of investors’ pro-sustainable beliefs – the beliefs about other investors’ pro-sustainable preferences – on sustainable investing. Using an incentive-compatible coordination game that incorporates important aspects of a stock market, we elicit investors’ pro-sustainable beliefs. We find that, first, investors with pro-sustainable beliefs invest in sustainable assets, even when controlling for investors’ pro-sustainable preferences. Second, investors with pro-sustainable preferences invest more in assets with positive sustainability performance than in assets with negative sustainability performance, a result we do not obtain for investors with pro-sustainable beliefs. This finding underscores the complementary relation and importance of pro-sustainable preferences and beliefs for sustainable investing.

Publication Information

TRR 266 researchers

Victor Schauer LMU Munich

External researchers

Valentin Luz

Martin Viehweger

Start Page

584

End Page

607

Volume Number

220

DOI

DOI Link

Cite this article as

Luz, V., Schauer, V. & Viehweger, M. (2024). Beyond preferences: Beliefs in sustainable investing. Journal of Economic Behavior & Organization, 220, 584-607. https://doi.org/10.1016/j.jebo.2024.02.018.

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Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, Goethe University Frankfurt, University of Cologne and Leibniz University Hannover who share the same research agenda.