Social Identification and Investment Decisions

42 Pages Posted: 4 Sep 2012 Last revised: 27 Apr 2015

See all articles by Rob Bauer

Rob Bauer

Maastricht University

Paul Smeets

Maastricht University

Date Written: April 24, 2015


This paper investigates the role of social identification in investment decisions. Social identity is an aspect of self-image based on in-group preferences and a perception of belonging to a social group. We collected survey data from retail clients of the only two banks in the Netherlands that exclusively offer socially responsible investment products and savings accounts. Our data show that almost half of the clients invest exclusively at these banks, whereas the other half also holds at least one conventional investment account. Clients vary widely in the extent to which they identify themselves with socially responsible investments (SRI). Investors with a strong social identification allocate substantially more of their wealth to these banks, both in terms of euros invested and in terms of percentage of their total portfolio invested. Social identification also mediates the effect of expected returns on SRI. Our results further show that social identification is stronger among highly educated, younger and low-wealth investors.

Keywords: Socially responsible investments (SRI), social identification, mutual funds

JEL Classification: G11, M14

Suggested Citation

Bauer, Rob and Smeets, Paul, Social Identification and Investment Decisions (April 24, 2015). Available at SSRN: or

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
+31 43 3883871 (Phone)

Paul Smeets (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
+31433883643 (Phone)

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