Similarity in Values and the Perceived Trustworthiness Of Investment Funds.

Summary The housing crisis of 2008 and more recently the European debt crisis spread a climate of mistrust amongst investors and the general public. We argue that financial institutions can foster trust through socially responsible investment funds thus contributing to global economic performance. We predict, however, that only funds with moral values similar to the ones of investors, are perceived to be more trustworthy than funds with different or without values. Using an innovative experimental design, we test the effect of value similarity and compare it to the effect of past financial performance. We find value similarity to be the underlying factor of the effect of social responsibility on trust. Simply labeling a fund as ethical did not impact trust ratings, and financial performance had a more general effect.