The Impact of COVID-19 on Investors' Investment Intention of Sustainability-Related Investment: Evidence from China

ABSTRACT

This paper investigates how investors respond to the COVID-19 pandemic, particularly regarding their intention to invest in sustainability-related investment (SRI) funds. We conduct two experiments online with participants who have experience with stock and fund investments. The first one includes 292 participants, which aims to explore investors' attitudes and investment intention of different sustainability-related components, and the second one includes 432 participants, which aims to examine how the COVID-19 pandemic affects individuals' attitudes and investment intention. Our results show that investors tend to invest in SRI funds when the threat of the COVID-19 pandemic is salient. Specifically, we find that although investors perceive environmental issues to be more important than economic and social issues, their investment intention of economic-focused SRI funds significantly increases in response to the COVID-19 pandemic threat. These findings suggest that fund managers can focus on particular types of investors when designing SRI funds, such as active investors with a preference for technical analysis and young female investors with a high level of income and education.