Review of Financial Studies 2026

Green Investing and Political Behavior

Florian Heeb^1,2; Julian F. Kölbel^3,4; Stefano Ramelli⁵; Anna Vasileva⁶

¹ Leibniz Institute for Financial Research SAFE, Goethe University Frankfurt, Germany, and , · ² MIT Sloan Frankfurt, Germany, and , · ³ University of St. Gallen, Swiss Finance Institute , , and , · ⁴ MIT Sloan , , and , · ⁵ University of St. Gallen and Swiss Finance Institute , · ⁶ University of Zurich

Abstract

A fundamental concern about green investing is that it may crowd out political support for public policies addressing negative externalities. We examine this concern in a preregistered experiment conducted shortly before a real referendum on a climate law in Switzerland. We find that offering an opportunity to invest in a climate-friendly fund does not reduce individual support for climate regulation, measured by political donations and voting intentions. A replication of the experiment in the United Kingdom yields similar results. Our estimates reject a crowding-out effect, suggesting instead a modest crowding-in effect of green investing on political support for green policies.

DOI

10.1093/rfs/hhag055

Language

en

Sources

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