Exploring the sustainability-risk appetite nexus: evidence from investor types in Borsa Istanbul

Hakan Uslu () and Gönül Çifçi ()
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Hakan Uslu: Samsun University
Gönül Çifçi: Adıyaman University

Risk Management, 2025, vol. 27, issue 4, No 8, 24 pages

Abstract: Abstract This study examines how sustainability influences investor risk appetite in Borsa Istanbul, considering both symmetric and asymmetric effects across different investor types. Using ARDL and NARDL models with weekly data from 2014 to 2023, the findings reveal that sustainability has a positive long-run impact on risk appetite, especially for international and institutional investors, while its short-run effects are negative, indicating an initial decline in risk-taking. Asymmetric results show that while long-run effects are symmetric, short-run reactions differ—positive changes reduce risk appetite more strongly than negative ones. Stock market performance consistently influences risk appetite, whereas macroeconomic risk has mixed effects. The COVID-19 period led to increased risk-taking among institutional and domestic investors. This study is the first to analyze sustainability and risk appetite in Türkiye, emphasizing the importance of considering asymmetric investor responses when integrating sustainability into financial markets.

Keywords: Sustainability; Green finance; Risk appetite; Risk tolerance; Risk perception; ARDL model (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41283-025-00176-6

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