Green Finance Literacy, Environmental Attitudes, and Sustainable Investment Behavior among Retail Investors in Emerging Economies: A Cross-National Structural Analysis

Abstract

The global green finance market surpassed USD 1 trillion in annual issuance in 2023, yet retail investor participation in environmentally sustainable financial instruments remains disproportionately concentrated in high-income economies. Understanding the behavioral and attitudinal determinants of sustainable investment decisions among retail investors in emerging markets is therefore a matter of both academic and policy urgency. This study examines the influence of green finance literacy, environmental attitudes, and perceived green investment risk on sustainable investment behavior among retail investors in India, South Africa, and Vietnam. Drawing on the Theory of Planned Behavior and the Value-Belief-Norm framework, a conceptual model is developed and tested using partial least squares structural equation modeling (PLS-SEM) on data collected from 596 retail investors. The measurement model demonstrates satisfactory reliability and validity across all constructs. Results reveal that green finance literacy exerts the strongest direct effect on sustainable investment behavior (beta = 0.48, p < 0.001), followed by environmental attitude (beta = 0.34, p < 0.001) and subjective norms (beta = 0.27, p < 0.01). Perceived green investment risk exerts a significant negative effect (beta = -0.31, p < 0.001). Income level and prior investment experience positively moderate the literacy-behavior relationship. Country-level invariance testing confirms partial metric invariance, with India and South Africa showing stronger literacy effects than Vietnam. The findings advance the behavioral green finance literature and offer targeted implications for financial regulators, investment platforms, and sustainability-oriented investor education programs.