Some Determinants of the Socially Responsible Investment Decision: A Cross-Country Study

This paper develops a general model of investor choice to analyze socially responsible investment (SRI). Drawing on data from a large survey of investors across five countries, we show that SRI may be driven more by investor attitudes toward the social aims of firms rather than by financial returns. We also show that investors who are concerned about social issues as consumers appear to extend this behavior into their portfolio strategies. We find little evidence that demographic factors affect SRI, but some indirect evidence that market context in terms of institutional ownership and the regulatory environment may play a role.