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Individual Sustainable Investment in Japan

Author

Listed:
  • 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.)

  • Toshi H. Arimura

    (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.)

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.

Suggested Citation

  • Gunnar Gutsche & Miwa Nakai & Toshi H. Arimura, 2021. "Individual Sustainable Investment in Japan," RIEEM Discussion Paper Series 2006, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:2006
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    More about this item

    Keywords

    Sustainable investments; individual investors; Japan; survey;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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