Does ESG Information Impact Individual Investors’ Portfolio Choices? – Evidence from an Experiment
34 Pages Posted: 24 Jan 2023
Date Written: January 21, 2023
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
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