Why do we invest ethically?

Beal, Diana and Goyen, Michelle and Phillips, Peter J. (2005) Why do we invest ethically? The Journal of Investing, 14 (3). pp. 66-77. ISSN 1068-0896

Preview	PDF (Submitted version) Beal_Goyen__Phillips1.pdf Download (168kB)
Preview	PDF (Published Version) Beal_Goyen_Phillips_JI_v14n3_PV.pdf Download (5MB)

Abstract

Analysis in this paper has proposed three potential motives for ethical investment - financial returns, non-wealth returns and social change. The motives are developed from
the literature and illustrated in the context of a 'best of sector' fund and a socially screened fund. We find that the proposed motives are neither exhaustive nor exclusive and one single motive will not explain the behaviour of all ethical investors. There may be a trade-off between financial and psychic returns for some investors. The trade-off for consumption-investors is expected to be close to zero (total utility is maximised with small levels of ethical investment in the fun of participation model) and is expected to vary with the ethical intensity of investment-investors, as shown when we include ethical
intensity into the investor's utility function. Psychic return can also be viewed as an increase in happiness and this approach would lend itself to empirical testing to increase our understanding of why we invest ethically.

Statistics for this ePrint Item

Item Type:	Article (Commonwealth Reporting Category C)
Refereed:	Yes
Item Status:	Live Archive
Faculty/School / Institute/Centre:	Historic - Faculty of Business - Department of Finance and Banking (Up to 31 Mar 2007)
Faculty/School / Institute/Centre:	Historic - Faculty of Business - Department of Finance and Banking (Up to 31 Mar 2007)
Date Deposited:	11 Oct 2007 00:18
Last Modified:	05 May 2021 03:02
Uncontrolled Keywords:	ethical investment; motives; financial and psychic returns; social responsibility; rational investing; investment motivation
Fields of Research (2008):	15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150299 Banking, Finance and Investment not elsewhere classified 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management 22 Philosophy and Religious Studies > 2201 Applied Ethics > 220102 Business Ethics
Fields of Research (2020):	35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350299 Banking, finance and investment not elsewhere classified 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3502 Banking, finance and investment > 350208 Investment and risk management 50 PHILOSOPHY AND RELIGIOUS STUDIES > 5001 Applied ethics > 500102 Business ethics
Socio-Economic Objectives (2008):	B Economic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900102 Investment Services (excl. Superannuation)
URI:	http://eprints.usq.edu.au/id/eprint/239

Actions (login required)

Archive Repository Staff Only