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Information barriers and SRI market participation – Can sustainability and transparency labels help?


  • Gunnar Gutsche

    () (University of Kassel)

  • Bernhard Zwergel

    () (University of Kassel)


This study empirically analyzes barriers preventing private investors from participating in the market of sustainable and responsible investments (SRI). Thereby, we link the strand of literature regarding participation costs of stockholding, i.e. information and transaction costs, to SRI market participation. The empirical analysis is based on a large online representative dataset for German financial decision makers containing data from a survey and a stated preferences discrete choice experiment, which refers to investment decisions between mutual funds. Contrary to most previous studies, we do not only differentiate between investors who are currently invested in SRI and those who are not invested. Instead we differentiate between four different investor groups, namely socially responsible, skeptical, interested, and conventional investors. We find that these groups face different barriers regarding SRI market participation. Particularly too high (perceived) information costs regarding SRI are a reason for private investors not to invest (more) in SRI. Having not received an offer by their bank seems to be a big hurdle especially for interested investors who seem to have problems overcoming the market entry barrier. Distrusting providers of SRI is an additional issue that especially hinders skeptical and conventional investors to invest (more) in SRI. Based on the experimental results, we see that information related barriers can be decreased by means of sustainability and/or transparency labels. Investor of all four groups have positive stated preferences for funds with transparency or sustainability labels. Hence, labels are an opportunity to decrease information costs of private investors and thus enhance individual demand for SRI.

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  • Gunnar Gutsche & Bernhard Zwergel, 2016. "Information barriers and SRI market participation – Can sustainability and transparency labels help?," MAGKS Papers on Economics 201624, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201624

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    Cited by:

    1. Gunnar Gutsche & Anja Köbrich León & Andreas Ziegler, 2016. "On the relevance of psychological motives, values, and norms for socially responsible investments: An econometric analysis," MAGKS Papers on Economics 201641, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item


    Sustainable and responsible investments; microeconometric analysis; stated preferences; discrete choice experiment; sustainability label; transparency; distrust; participation costs; market participation;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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