Individual Sustainable Investment in Japan

Gunnar Gutsche, Miwa Nakai and Toshi Arimura
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Gunnar Gutsche: University of Kassel, Institute of Economics, Nora-Platiel-Str. 5, 34109 Kassel, Germany.
Miwa Nakai: Fukui Prefectural University, Faculty of Economics, 4-1-1, Matsuoka Kenjojima, Eiheiji-cho, Fukui, 910-1195, Japan.

RIEEM Discussion Paper Series from Research Institute for Environmental Economics and Management, Waseda University

Abstract: Given the limited literature on sustainable investment behavior in the East Asian region, this study empirically examines individual sustainable investment behavior in Japan from three perspectives. Based on data from a representative web-based survey among financial decision makers in Japanese households, we analyze i) the individual awareness of sustainable investments, ii) the current share of sustainable investments in individual investors' portfolios, and iii) the individual investors' intention invest sustainably in the future. We find that the clear minority has ever heard of sustainable investments before, indicating huge information deficits among Japanese individual investors and that individual sustainable investment in Japan is still in its infancy. Moreover, financial literacy, social signaling or word-of-mouth learning, perceived financial performance, and risk preferences are the most important determinants of current individual sustainable investments in Japan. Remarkably, non-financial factors such as personal attitudes and values seem to be less important than in Western countries, suggesting country and cultural differences in individual investment behavior. Nevertheless, the intention to invest in a sustainable manner in the future is also driven by individual environmental values and ecological political identification. Overall, our results imply several potential avenues for practitioners and policymakers to mobilize individual investors for sustainable investments in the future.

Keywords: Sustainable investments; individual investors; Japan; survey (search for similar items in EconPapers)
JEL-codes: C25 G11 Q56 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2021-01
New Economics Papers: this item is included in nep-env and nep-fle
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