Cultural values and cross‐country differences in responsible investing sectors

Abstract Given the large variations in the evolution and the size of the responsible investing (RI) mutual fund sectors across countries, we examine factors affecting their growth. We find that the size of a country's RI fund industry, whether measured relative to the size of the conventional fund industry, total equity market capitalization, or relative to the country's GDP, is strongly related to the country's cultural norms, as measured by dimensions from Hofstede, World Values Survey, or GLOBE. The RI fund sector also increases with the country's wealth, as measured by the GDP per capita.