Does ESG Information Impact Individual Investors’ Portfolio Choices? – Evidence from an Experiment

34 Pages Posted: 24 Jan 2023

See all articles by Catharina Janz

Catharina Janz

WHU - Otto Beisheim School of Management

Rainer Michael Rilke

WHU - Otto Beisheim School of Management

B. Burcin Yurtoglu

WHU - Otto Beisheim School of Management

Date Written: January 21, 2023

Abstract

We use a web-based asset market experiment to study whether ESG information affects the portfolio choices of retail investors. We find a significantly higher portfolio allocation to stocks with ESG information in the order of 11 percentage points compared to a control group where no ESG information is released. ESG information impacts retail investors regardless of its association with one of its components (Environment, Social or Governance) and degree of detail. We also find that less educated individuals, especially those with little investment experience and, on average, younger, invest more heavily in ESG-friendly stocks. We do not find meaningful differences across gender, financial literacy, and personality traits.

Keywords: ESG, Corporate social responsibility, Environmental, Social, Governance, Investor behavior, Experiment

JEL Classification: G18, G30, G34, G39, K22, K29

Suggested Citation

Janz, Catharina and Rilke, Rainer Michael and Yurtoglu, B. Burcin, Does ESG Information Impact Individual Investors’ Portfolio Choices? – Evidence from an Experiment (January 21, 2023). Available at SSRN: https://ssrn.com/abstract=4332893

Catharina Janz

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Rainer Michael Rilke

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

B. Burcin Yurtoglu (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Chair of Corporate Finance
Burgplatz 2
Vallendar, 56179
Germany
+49 261 6509-721 (Phone)
+49 261 6509-729 (Fax)

HOME PAGE: http://www.whu.edu/forschung/fakultaet/finance-group/corporate-finance/

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