Investor characteristics, intention toward socially responsible investment (SRI), and SRI behavior in Chinese stock market: The moderating role of risk propensity

In recent years, Socially Responsible Investment (SRI), which integrates financial returns with social impact, has gained prominence. Commonly referred to as ethical or green investing, this study employs the Theory of Planned Behavior (TPB) to analyze factors that influence SRI behaviors. The TPB model suggests that behavior is primarily influenced by attitudes, subjective norms, perceived behavioral control (PBC), and intention. The study uniquely adapts the TPB model by incorporating financial literacy as a critical factor, a hypothesis substantiated through primary data from Chinese investors. Furthermore, the research highlights risk propensity as a moderating variable, significantly affecting these dynamics and offering essential insights into SRI practices. By utilizing Structural Equation Modeling (SEM) in conjunction with TPB, the study investigates the behavioral patterns of investors in Chinese stock market with a specific focus on the impacts of financial literacy, the moderating role of risk propensity, and the mediating effects of investment intentions on SRI behaviors. The findings reveal that PBC plays the most crucial role in shaping investors' intentions and behaviors toward SRI. Additionally, the results recommend that policymakers and SRI providers consider the social influences on investors' decisions and acknowledge the significant impact of investors' perceived control in forming their SRI intentions and actions.