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Financial literacy and Value orientation on ESG Investing : A Causal analysis with Endogeneity correction
Ahn, Hee Soo (2025) Financial literacy and Value orientation on ESG Investing : A Causal analysis with Endogeneity correction.
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| Abstract: | This study investigates how investor characteristics—financial literacy, altruism, and materialism—influence attitudes toward ESG (Environmental, Social, and Governance) investing, and to what these relationships change when correcting for endogeneity. The research applies both the Knowledge–Attitude–Behavior (KAB) model, extended by the Theory of Planned Behavior (TPB), and the Value–Attitude–Behavior (VAB) model to provide a multidimensional explanation of ESG attitude formation. Data were collected through an online survey of 274 participants. The analysis employed Two-Stage Least Squares (2SLS) regression to address potential endogeneity in financial literacy. Findings indicate that altruism is positively associated with favorable ESG attitudes, while materialism shows a negative association. Financial literacy was initially positively correlated with ESG attitudes but became statistically insignificant after endogeneity correction. Demographic factors such as age, gender, and income had limited explanatory power. These results suggest that value orientations may exert a more stable influence on ESG attitudes than financial knowledge, particularly when accounting for endogenous traits. The joint application of KAB+TPB and VAB frameworks provides theoretical support for including both cognitive and motivational pathways in attitude modeling. Practically, the findings highlight the need for investor engagement strategies that align with underlying value profiles, rather than relying solely on financial education to promote ESG investing. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/106940 |
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