Behavioural Drivers of Socially Responsible Investment Adoption among Indian Retail Investors: A PLS-SEM Approach

The global growth on sustainability and ethical investment practices has gained a significant rise in Socially Responsible Investment (SRI) among the retail investors. Despite its world-wide growth, the behavioural determinants that influences individual retail investors’ intentions in regional contexts such as Gujarat yet to be explored. This research study investigates the independent variable effects of environmental/biospheric values, perceived SRI performance, perceived self-efficacy, and social norms on investors’ attitudes and intentions, with attitude serving as a mediating variable under the theory of planned behaviour framework. Socio-demographic variables such as income level and investment experience were also examined as moderators. The Primary data were collected through a structured questionnaire from 272 retail investors across the Gujarat. The Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed for data analysis. Under the model, Measurement model evaluation has indicated high reliability with Cronbach’s α = 0.853–0.936, composite reliability = 0.893–0.949 and with strong convergent and discriminant validity having AVE = 0.681–0.758 and Fornell-Larcker and HTMT criteria satisfied. The Structural model results indicates that perceived SRI performance with β = 0.331 and self-efficacy with β = 0.284, and social norms β = 0.254 significantly influenced attitude and in turn it also positively affected the investment intention β = 0.19. Perceived SRI performance and perceived self-efficacy also had direct effects on investor’ intention while the income level has positively moderated the attitude to intention relationship. Investment experience exhibited negligible moderation. The model also explained 67.9% of the variance in attitude and 60.1% in investment intention that indicates moderate to strong explanatory power. The Findings of the study also provide empirical evidence of the psychological, social, and demographic drivers of SRI adoption and offers actionable insights required for policy development, investor education and in future the promotion of sustainable finance practices in India.