International and Cultural Views


Research Associate, RWTH Aachen University


As a response to social and environmental challenges imposed through globalization and industrialization, private, institutional, and corporate investors adopted a new mind-set and increased interest in investment with social and environmental considerations. A huge literature in the field of business ethics has emerged with growing evidence of systematic attempts to combine moral or ecological factors with conventional criteria in financial decision making (Egri and Ralston 2008). Although evidence exists that social responsibility in financial markets is growing, the literature remains vague about the underlying motives of investors (Agle and Van Buren 1999).

Until recently, the finance literature has largely ignored a country's national characteristics such as the cultural, social, legal, and political environment. Lately, however, an extensive body of work has been advanced and documented that national features are fundamental sources of differences in financial development among nations (Aggarwal and Goodell 2009). But what are the specific factors that drive developments in sustainable finance and investment? The literature fails to provide a comprehensive answer to this question. This chapter investigates the effect of differences in the institutional environment on the social and ecological behavior of firms and investors around the world. It examines ...

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