Publication in Journal of Economic Behavior & Organization

Professor Dr. Lars Hornuf has published a new article in the  Journal of Economic Behavior & Organization under the title „Why Do Retail Investors Pick Green Investments? A Lab-in-the-Field Experiment with Crowdfunders”. The article emerged in collaboration with Dr. Christoph Siemroth from the University of Essex.

Do investors invest in green projects because they expect higher returns, to help the environment, or to help other people? To separate these motivations, the authors run a decision experiment in which crowdfunders choose between a higher return or a positive environmental impact, and between a higher return or a positive social impact. A majority of investors choose environmental and social impact over higher returns, conditional on large enough impact. Combining the experimental data with historical investments, the authors find that investors allocate a larger share of funds to green projects if they value environmental impact more and if they expect a higher return, but not if they value social impact more, all else equal. These findings suggest that investors have a preference for positive environmental impact, and satisfy it by investing in green projects. Finally, the authors introduce new survey measures of impact for future use, which are experimentally validated and predict field behavior.