Investor Relations in the Fashion Industry: An Investigation of the Investor Relations in the Fashion Industry: An Investigation of the Role of Sustainability in Investment Using the Situational Theory Role of Sustainability in Investment Using the Situational Theory of Problem-Solving and Organization-Public Relationship of Problem-Solving and Organization-Public Relationship Frameworks Frameworks

Abstract

This study examines the factors affecting individual investors' decision-making in the fashion industry, focusing on the impact of sustainability and investor relations. By employing both the Situational Theory of Problem Solving (STOPS) and the Organization- Public Relationship (OPR) frameworks, this paper investigates the influence of variables such as problem recognition, constraint recognition, involvement recognition, and relationship qualities, including commitment and control mutuality, on investors' situational motivation and communication actions. Weighted regression analysis was conducted to evaluate hypotheses pertaining to these variables. The study also explores the types and sources of investment information that investors most used and preferred. The findings show that most STOPS’ predictors effectively triggers investors' motivation regarding investment, whereas commitment and control mutuality substantially impact communicative behaviors and investment intentions. Among communicative actions, information acquisition significantly influences investors' willingness to invest in fashion companies. In addition, the study emphasizes the importance of financial and sustainability reporting communication, primarily via the company’s annual reports and SEC filings, when considering investment in the fashion industry. The findings highlight the increasing value of incorporating Environmental, Social, and Governance (ESG) standards alongside financial performance reports to appeal to both profit-oriented and socially responsible investors. Practical implications suggest that fashion firms should prioritize the transparent communication of brand identity and accomplishments, enhance investor participation via collaborative platforms, and design sustainable strategies to align with investor expectations. This study advances the knowledge of investors' behaviors in the fashion industry and provides insightful guidance for improving investor relations approaches.