Green Preference, Green Investment

Zhenyu Gao (), Yan Luo (), Shu Tian () and Hao Yang
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Zhenyu Gao: Chinese University of Hong Kong
Yan Luo: Fudan University
Shu Tian: Asian Development Bank
Hao Yang: Fudan University

No 722, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Based on Alibaba’s renowned “green” initiative, the Ant Forest program, we develop a novel measure to reveal an individual investor’s nonpecuniary green preference and link it to an individual’s investment actions. We present compelling evidence that supports nonfinancial incentives for investing in green mutual funds while divesting from “brown” funds. Concerns over climate physical and regulatory risks further reinforce this influence. Individuals’ green preferences do not lead to financial gains from trading. Moreover, we mitigate the endogeneity issue by employing the development of a local subway network as a source of variations in green preferences.

Keywords: nonpecuniary preference; revealed preference; sustainable finance; FinTech (search for similar items in EconPapers)
JEL-codes: G11 G50 Q55 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2024-04-24
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0722

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