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Willingness to Sacrifice to Optimize Financial and Non-Financial Goals in Ethical Investing

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  • Farah Amalia
  • Harjum Muharam
  • Irene Rini Demi Pangestuti

Abstract

Ethical investing has recently been on the rise in popularity. Nevertheless, at the same time, the investment generates lower returns than its competitors. So, ethical investors have to sacrifice some returns to keep investing ethically. This study examines the direct influence and mediation of willingness to sacrifice variables on ethical investment decisions. The method used is Structural Equation Modelling Partial Least Square (SEM-PLS). Results show that willingness to sacrifice influences ethical investment decisions positively and significantly. Furthermore, willingness to sacrifice has been shown to mediate the influence of non-financial motives on ethical investment decisions. It shows a shift in behaviour, and investors are willing to ignore some of the returns obtained to achieve non-financial goals.

Suggested Citation

  • Farah Amalia & Harjum Muharam & Irene Rini Demi Pangestuti, 2024. "Willingness to Sacrifice to Optimize Financial and Non-Financial Goals in Ethical Investing," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 8, pages 114-129.
    • Handle: RePEc:bas:econst:y:2024:i:8:p:114-129
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    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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