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Experienced and Novice Investors: Does Environmental Information Influence on Investment Allocation Decisions?

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Author Info
Holm, Claus () (Department of Management Science and Logistics, Aarhus School of Business)
Rikhardsson, Pall () (Department of Management Science and Logistics, Aarhus School of Business)
Abstract

This paper examines the effect of environmental information on the investment

decisions of investors. The motivation for the experimental design

applied in this study is that unless actual decision making is observed,

the potential usefulness of environmental information (or lack

thereof) cannot be taken for granted. The study is based on an experiment

where groups of investors (varied by experience) were asked to

make investment allocation decisions based on financial information and

on supplementary environmental information (varied between cases). As

an investment allocation decision (varied by investment horizons) the

groups were asked to allocate funds to two companies based on the available

information. The findings suggest that environmental information has

the potential to influence investment allocation decisions. The findings

also suggest that the influence of environmental information on investment

allocation decisions is mitigated by the variables considered explicitly

in this study, i.e., the investment horizon (varied as short and long)

and investor experience (varied as novice and experienced investor). It is

concluded that because allocation decisions are multifaceted problems,

mixed results related to the influence of environmental information should

be expected

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Publisher Info
Paper provided by University of Aarhus, Aarhus School of Business, Department of Business Studies in its series Financial Reporting Research Group Working Papers with number R-2006-02.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 66 pages
Date of creation: 14 Jun 2006
Date of revision:
Handle: RePEc:hhb:aarbfr:2006-002

Contact details of provider:
Postal: The Aarhus School of Business, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark
Fax: + 45 86 15 19 43
Web page: http://www.asb.dk/about/departments/bs.aspx
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Related research
Keywords: Environmental reporting; Environmental disclosures; Allocation; Decision making; Investment horizon; Investors; Experiment;

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ingram, Robert W. & Frazier, Katherine Beal, 1983. "Narrative disclosures in annual reports," Journal of Business Research, Elsevier, vol. 11(1), pages 49-60, March. [Downloadable!] (restricted)
  2. Patten, Dennis M., 1992. "Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory," Accounting, Organizations and Society, Elsevier, vol. 17(5), pages 471-475, July. [Downloadable!] (restricted)
  3. Jose M. Moneva, Fernando Llena, 2000. "Environmental disclosures in the annual reports of large companies in Spain," European Accounting Review, Taylor and Francis Journals, vol. 9(1), pages 7-29, May. [Downloadable!] (restricted)
  4. Kagel, John H & Levin, Dan, 2001. "Behavior in Multi-unit Demand Auctions: Experiments with Uniform Price and Dynamic Vickrey Auctions," Econometrica, Econometric Society, vol. 69(2), pages 413-54, March.
  5. Belkaoui, Ahmed, 1980. "The impact of socio-economic accounting statements on the investment decision: An empirical study," Accounting, Organizations and Society, Elsevier, vol. 5(3), pages 263-283, July. [Downloadable!] (restricted)
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