Does Wealth Matter for Responsible Investment?

[We’re pleased to welcome authors Trond Døskeland and Lars Jacob Tynes Pedersen of the NHH Norwegian School of Economics. They recently published an article in Business & Society entitled “Does Wealth Matter for Responsible Investment? Experimental Evidence on the Weighing of Financial and Moral Arguments,” which is currently free to read for a limited time. Below, they reflect on the motivations and challenges of this research:]


Responsible investment is increasingly prevalent, and both financial and moral concerns can drive such investment. In this article, we investigate how responsible investors of different wealth weigh financial and moral arguments. Prior research on different factors that may co-determine responsible investment behavior yield competing predictions about the influence of personal wealth on investment. We conduct a large-scale natural field experiment on responsible investment, wherein we treat investors with financial, moral and no arguments, respectively. We find that there is a statistically and economically significant difference in responsiveness to financial and moral arguments between investors of different wealth. Specifically, financial arguments are more effective than are moral arguments for high wealth investors but not for low wealth investors, and the effect is particularly high for the wealthiest investors. The findings hold for several different measures of wealth. Our findings contribute to the understanding of the moderating effect of wealth on responsible investment choice. Furthermore, these insights may enable more fine-tuned strategies to stimulate responsible investment among different individual investor segments.

What motivated you to pursue this research?

We are two colleagues – one finance scholar and one business ethics scholar – who suddenly found ourselves working together at the same department. At the time, responsible investment was taking off in Norway, both as a consequence of the early efforts of the Norwegian Sovereign Wealth fund and their pioneering responsible investment efforts, and in the market for private individual investors. We realized that our complementing research interests and knowledge made it possible for us to do interesting work on this emerging topic together.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

It is challenging to conduct experimental research in close collaboration with companies, because it requires an alignment of the objectives of the research team and the managers of the company. Our field experiment on responsible investment was carried out in the Norwegian bank Skandiabanken. We were fortunate that the managers of the company really valued doing empirical research practice, and we succeeded in designing a project that had research value from a theoretical point of view and value for the company in practical terms. However, typically the time horizons of researchers and business managers are different, and we have different “currencies” – they want actionable insights that can inform business decisions, while our goal is scientific publication. However, we believe that we managed to achieve both objectives in this study.

In what ways is your research innovative, and how do you think it will impact the field?

We run large-scale natural field experiments to understand the decisions of individuals and firms, and we believe that this methodology is very valuable (and still underexploited) to study questions relevant to business and society. We were happy to see that the journal Business & Society called for more experimental work in a recent piece by the journal’s editors, and we hope to see many more field experiments in this field.

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