Is knowledge alone enough for socially responsible investing? A moderation of religiosity and serial mediation analysis

Abstract

Purpose

This study aims to test the serial mediation effect of attitude toward socially responsible investing (SRI) and social investing efficacy (SIE) on the relationship of knowledge about SRI with the intention to invest in SRI along with moderating effect of religiosity.

Design/methodology/approach

The study uses a quantitative analysis approach, wherein the data has been collected from 569 north Indian retail investors. Partial least square (PLS)-structural equation modeling has been applied in this study using the latest version of SmartPLS (v. 3.2.8) software to examine the complex model of serial and moderated mediation.

Findings

Attitude toward SRI and SIE significantly and serially mediate the relationship between knowledge about SRI and intention to invest in SRI. Also, the interaction effect of religiosity with knowledge about SRI is significant only for SIE and not for attitude toward SRI.

Research limitations/implications

The study is cross-sectional in nature conducted only on the north Indian investors. Besides knowledge, there can be many other personal or social aspects that might affect SRI intention that have not been taken into the study.

Practical implications

The results suggested that the companies, financial advisors and governmental bodies can improvise upon social and environmental performance reporting so that investment in SRI can be promulgated.

Social implications

The paper concludes that religious-minded people are more open to the idea of investing in SRI. India, being is a religious-minded country, the results of this study suggest that there is good potential for the development of SRI in India.

Originality/value

Empirical evidence regarding the relationship of SRI intention with its determinants is limited in Asian countries. Prior literature mainly provides evidence from developed countries where social and governance systems are comparatively stronger. The study provides evidence for the bright future of SRI in India, where investor’s beliefs are dominated by their religious values.

Citation

Mehta, P., Singh, M., Mittal, M. and Singla, H. (2022), "Is knowledge alone enough for socially responsible investing? A moderation of religiosity and serial mediation analysis", Qualitative Research in Financial Markets, Vol. 14 No. 3, pp. 413-432. https://doi.org/10.1108/QRFM-11-2020-0218