Socially responsible investments. An emperical study on the heterogeneity across developed countries

Abstract

Socially responsible investments (SRI) have experienced a rapid growth, reflecting the integration of environmental, social and governance criteria in investment decisions becomes mainstream. The aim of the current study is to identify the determinants that explain the substantial differences in size of the national SRI market across 15 developed countries between 2005 and 2013. The current study takes a preliminary model – proposed by Scholtens and Sievänen (2013) - as the point of departure. Macro-level factors related to institutions, culture, economic development and finance can be associated with the size of SRI, theoretically. The empirical results of the current study support the model partially, since economic development and masculinity impact the size of the SRI market. Where economic development positively impacts the size of the SRI market, a feminine society exhibits more sustainable investments. Furthermore, Scholtens and Sievänen’s (2013) model propose mediation effects of the macro-level factors. Where institutions condition economic development and finance, cultural differences condition institutions, economic development and finance. The current study analysed these mediation effects, using a mediation model. The empirical results, however, do not support the proposed mediation effects.