Perfectionist decision-making style and ethical investment willingness: A two-factor causal mediation model

Abstract

Purpose

The purpose of this paper is to examine the ethical investment willingness decision-making process to understand how investors evaluate corporate social responsibility (CSR) actions.

Design/methodology/approach

Data were collected through a survey of 298 individual investors and analyzed using structural equation modeling.

Findings

Results reveal that perfectionist decision-making style is positively related to perceived moral intensity, substitutability of financial returns, and ethical investment willingness. In addition, perceived moral intensity and substitutability of financial returns are positively related to ethical investment willingness. Finally, perceived moral intensity is positively related to substitutability of financial returns, and a two-factor causal mediation model is supported.

Research limitations/implications

The limitation of this study was that the pre-tests and sampling methods required all participants to have investing experience; however, procurement of trading information for each investor was impossible; thus, actual investment behaviors were undetermined. This study shed light on the mediating roles of perceived moral intensity and the substitutability of financial returns. Future studies can further investigate the factors influencing perceived moral intensity and the substitutability of financial returns.

Practical implications

Future ethical investment education can focus on cultivate the ability to distinguish ethical investments and change ethical investment willingness into actual investment behavior.

Originality/value

Understanding the relationship between these variables can help understand why ethical investment willingness varies among investors and how the traditional financial theory investment decision model should be revised as, internationally, more people have begun to observe CSR and sustainable development.

Citation

Lin, Y.-C., Huang, C.-Y. and Wei, Y.-S. (2018), "Perfectionist decision-making style and ethical investment willingness: A two-factor causal mediation model", Management Decision, Vol. 56 No. 3, pp. 534-549. https://doi.org/10.1108/MD-05-2017-0492