Antecedents of Socially Responsible Investment Behaviour: A SEM-ANN Analysis of Financial Literacy, Environmental Beliefs and Social Norms Through Social Cognitive Theory

The present study focuses on deciphering how varied psychological and cognitive factors interact in shaping the way Indian retail investors approach socially responsible investments (SRIs), based on social cognitive theory. A well-grounded set of 487 active, registered Indian retail investors were accumulated for the purpose of obtaining meaningful patterns by implementing a hybrid data analysis approach by mixing structural equation modelling and an Artificial Neural Network, using SmartPLS 4 and SPSS 21.0. The results confirm that all the determinants, including financial literacy, environmental beliefs and the extent to which people adhere to social cues, tend to strongly predict the SRI behaviour of a retail investor. Interestingly, ‘social norms’, among all predictors, surfaced as the strongest determinant of SRI behaviour. These insights can be practically implemented in designing sustainable financial literacy programmes, which could further give investors the confidence to include SRI options in their portfolios.