Effect of financial knowledge and information behavior on sustainable investments: evidence from India

This study aims to explore the relationship between information behavior and sustainable investments in the Indian context. First, a conceptual model is developed and the relationship between information access and subjective financial knowledge and information behavior of investors. Then, after checking the psychometric properties of the survey instrument, data collected from 301 investors in the southern part of India was analyzed using structural equation modeling (Smart PLS software). The results indicate that (i) information access and subjective financial knowledge are positively associated with information behavior, (ii) information behavior is positively related to risk propensity, (iii) risk propensity and cognitive biases are positively related to sustainable investments, and (iv) risk propensity mediates the relationship between information behavior and sustainable investments. Finally, the implications for investors and practicing managers are discussed.