EconPapers    
Economics at your fingertips  
 

Aggregate confusion or inner conflict? An experimental analysis of investors’ reaction to greenwashing

Philipp Kleffel and Matthias Muck

Finance Research Letters, 2023, vol. 53, issue C

Abstract: This research conducts a stated choice experiment to analyse how potential greenwashing is perceived by retail investors. Results suggest that on the aggregate, investors might fall for greenwashed assets. Considering the intrinsic motivation for sustainable investing, we find that warm-glow investors are willing to pay a premium for eliminating greenwashing risk while this is not the case for environmentalists. A possible explanation for this phenomenon is that environmentalists are primarily concerned about the resolution of cognitive dissonance between their actions and their intention to protect the environment. The validity of green labels is of secondary importance to resolve cognitive dissonance.

Keywords: Greenwashing; Sustainable investing; Cognitive dissonance; Stated choice experiment; Sustainability reporting; Investor behaviour (search for similar items in EconPapers)
JEL-codes: G11 G41 M48 Q56 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612322005980
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322005980

DOI: 10.1016/j.frl.2022.103421

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612322005980