Ethics and sustainable government bonds: The retail investors’ perspective

Using the Hunt-Vitell model, this study examines how ethical considerations (ethical sensitivity, perceived utilitarian value as a proxy for ethical egoism, and social investing efficacy reflecting utilitarianism) influence Indonesian retail investors' ethical judgment and decision to invest in sustainable government bonds. Data were collected from 511 Indonesian individual capital market investors and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that these factors significantly shape investors' ethical evaluations and investment intentions. However, a potential ‘attitude-behavior gap’ exists, where positive ethical judgments do not always translate into a willingness to forgo financial returns. This highlights the intricate relationship between ethical considerations and perceived consequences in sustainable investing. The study contributes to consumer ethics literature by extending the ethical decision-making framework in the sustainable investing domain. It offers valuable insights for sovereign issuers seeking to promote sustainable government securities to the retail market.