Affective Influences on Risk-Return Perceptions of Renewable Energy Investors: An Experimental Analysis of Differences between Financial and Strategic Investors
Type
applied research project
Start Date
01 January 2012
End Date
31 August 2013
URI
Status
completed
Keywords
Investment Decision
Bounded Rationality
Asset Allocation
Energy Policy
Description
While renewable energies are a relatively young market with risk and uncertainties, they also exhibit attractive growth prospects for financial and strategic investors. Confronted with recent turmoil in the financial system, large institutional investors with a long-term horizon are looking for alternative investment opportunities. Beyond real estate investments, the financing of renewable energy projects is increasingly seen as an attractive asset class by institutional investors. A neglected dimension that heavily influences investments is energy policy. Recent research suggests that investment decision-making is subject to influence beyond risk and return, such as affect.

The Novelty of the proposed research project is twofold. We

(a) compare affective influences between strategic and financial investors, and
(b) use an innovative experimental approach combined with a final reflection of the results in focus groups.

The main research questions of this project are
- What is the role of affective influences on risk-return perceptions of investors in renewable energy projects?
- How do these perceptions differ between financial and strategic investors in renewable energy projects?
- What are the implications for designing effective energy policies in Switzerland?

The final project report is now available online:
http://www.bfe.admin.ch/forschungewg/02544/02810/index.html?lang=en&dossier_id=06122
Leader contributor(s)
Funder(s)
Topic(s)
Energy Economics
Energy Policy
Energy Finance
Technology and Innovation Management
Behavioral Finance
Decision Sciences
Method(s)
Focus Groups
Interviews
Experimental Methods
Range
Institute/School
Range (De)
Institut/School
Principal
Swiss Federal Office of Energy
Division(s)
Eprints ID
208611
Reference Number
REF-1081-00220

Filters

Reset filters

Settings
Now showing 1 - 1 of 1
  • Publication
    Implicit Cognition, Capabilities, and Incentives: Assessing Investment Response to the Renewable Energy Revolution
    ( 2013-07-26)
    Chassot, Sylviane
    This study examines how cognition, capabilities and incentives shape investment responses to renewable energies as an innovation that currently fundamentally changes energy industries. I focus on implicit managerial cognition and measure it with an Implicit Association Test. In two separate studies with industrial and financial investors, I find a significant interaction effect of investor type with implicit cognition on the dependent variable energy investments. Implicit cognition has an influence on industrial investors' decision to invest in renewable versus fossil energy, whereas it has no influence among financial investors. Furthermore, the lack of organizational incentives to invest has a negative effect on renewable energy investments, whereas lack of organizational capabilities has no significant impact. The study provides unique empirical evidence on the influence of implicit cognition in investment decision-making of professional investors. It has implications not only for the energy industry, but also for a better understanding of investment decision-making processes that are at the root of the current financial crisis.
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/88945