Personal values, Responsible investing and stock allocation

We analyze the portfolio choices of approximately 965,500 active participants in employee saving plans in France. Looking at the cross-section of equity exposure, we find that the inclusion of responsible equity options in the menu of available funds is associated with a 2.4% higher equity allocation by plan participants. Difference-in-differences analyses confirm that the introduction of a responsible equity option to a saving plan is followed by an increase of 6.5% in participants’ appetite for stocks, contrary to what happens with conventional equity funds. Additional analyses along the geographical variation in political preferences indicate that the observed effect is driven by social and cultural factors.

JEL Classification: A13, D14, G11, G41, G50
Keywords: Behavioral finance, investor preferences, sustainable finance