A qualitative phenomenological exploration of social mood and investors’ risk tolerance in an emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Humaira Asad ◽  
Iqra Toqeer ◽  
Khalid Mahmood
Keyword(s):  
Theoretical Model ◽  
Thematic Analysis ◽  
Financial Literacy ◽  
Financial Risk ◽  
Theoretical Perspective ◽  
Emerging Economy ◽  
Risk Tolerance ◽  
Validity And Reliability ◽  
Content Type ◽  
Depth Analysis

Purpose The authors design a theoretical perspective that explores how different phases of social mood influence financial risk tolerance (FRT) among investors. Risk is involved in almost all financial decision-making. For a better understanding of risk tolerance behavior, the role played by social mood cannot be ignored. This study aims to explore the linkage between social mood and FRT of investors in Pakistan. Design/methodology/approach Using qualitative phenomenology as the guiding framework, 22 interviews were conducted to have a deeper understanding of the lived experiences of investors with at least 10 years of investment experience. Thematic analysis was done to analyze data. Audio-recording, bracketing, triangulation and member checking were done to ensure validity and reliability. Findings A theoretical model is developed using the six themes identified through thematic analysis. This model presents an in-depth analysis of the determinants of social mood, its multiple phases and its impact on risk tolerance behavior. Findings reveal that the level of financial literacy, experience and purpose of investment moderate the effect of social mood on FRT. Practical implications Investors can manage risk and increase their profits by controlling the effects of social mood. They can benefit from the market situation by taking more risk when the market is extremely low. The advisors can frame their advice in the light of the model. Originality/value According to the authors’ knowledge, this is the first study that explores investors’ risk tolerance in response to variations in social mood in the context of an emerging economy. The paper has contributed conceptually and methodologically. It uses phenomenology as the method and develops a theoretical model that describes how different types of investors adjust their risk tolerance in response to changes in their social mood.

Market discipline in the behavioral finance perspective: a case of Sharia mutual funds in Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Umi Widyastuti ◽  
Erie Febrian ◽  
Sutisna Sutisna ◽  
Tettet Fitrijanti
Keyword(s):  
Mutual Funds ◽  
Behavioral Finance ◽  
Financial Literacy ◽  
Financial Risk ◽  
Market Discipline ◽  
Risk Tolerance ◽  
Exogenous Variables ◽  
Content Type ◽  
Withdrawal Behavior ◽  
Financial Risk Tolerance

Purpose This study aims to determine antecedents of market discipline. A model was constructed by extending the theory of planned behavior (TPB) to explore the cognitive, psychological and social factors that influence the market discipline in the form of withdrawal behavior. Design/methodology/approach This study applied a quantitative approach by surveying 181 Indonesian retail investors in Sharia mutual funds, which were represented by civil servants. The samples were collected using the purposive sampling technique. This study used the partial least square–structural equation model to analyze the data. Findings The results revealed that the Islamic financial literacy, the attitudes toward withdrawal, the subjective norms and the perceived behavioral control had a positive significant effect on the withdrawal intention, whereas financial risk tolerance had an insignificant impact. Then, all the exogenous variables and intention to withdraw had a significant contribution in explaining market discipline. Contrary to the proposed hypothesis, the attitude toward withdrawal had a negative impact on market discipline. The structural model indicated that the TPB could be extended by adding some exogenous variables (i.e. Islamic financial literacy and financial risk tolerance) in determining the intention to withdraw and withdrawal behavior, which indicated the market discipline in Sharia mutual funds. Research limitations/implications This study was limited to individual investors who work as civil servants. This study did not accommodate different demographic factors such as age and gender, which influence fund withdrawal behavior. Practical implications The government must focus on the inclusion of market discipline in Sharia mutual funds’ regulation to encourage the risk management disclosure, specifically that related to Sharia compliance. Originality/value Previous studies applied a traditional finance theory to predict market discipline, but this study contributes to filling the theoretical gap by explaining the market discipline from a behavioral finance perspective that was found in Sharia mutual funds.

scholarly journals A test of the association between the initial surge in COVID-19 cases and subsequent changes in financial risk tolerance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wookjae Heo ◽  
John E. Grable ◽  
Abed G. Rabbani
Keyword(s):  
Young People ◽  
Financial Literacy ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Service Firms ◽  
Significant Drop ◽  
Content Type ◽  
Health Situation ◽  
Financial Risk Tolerance ◽  
Practical Implications

PurposeThe purpose of this paper is to provide an estimate of the degree to which financial risk tolerance changed in relation to the initial surge of COVID-19 cases in the US.Design/methodology/approachData from a large sample of investors and other consumers covering the period beginning April 2019 and ending in early May 2020 were used to estimate aggregate levels of financial risk tolerance and to determine if the willingness to take financial risk changed across five distinct periods in relation to the spread of COVID-19.FindingsA general reduction in aggregate levels of financial risk tolerance was observed during the initial peak of COVID-19 period and the subsequent declaration of a pandemic, with the most significant drop in risk tolerance being exhibited by those who were 25 years of age or younger.Practical implicationsThe findings from this study – primarily that in terms of FRT, the COVID-19 pandemic impacted young people disproportionately – suggest that in addition to helping young people feel comfortable in terms of their personal health situation and access to employment and health insurance, policy makers, financial service firms and financial literacy educators should provide information and guidance to young people regarding why being willing to take financial risks is important and how FRT corresponds to the proper functioning of the investment markets.Originality/valueA data-drive methodology was utilized in this study to define the periods. This approach was taken due to the lack of defined and published pandemic interval periods specific to COVID19. However, the findings based on the data-driven methodology bring practical implications such as young people are sincerely considered in the catastrophic situation.

Why does subjective financial literacy hinder retirement saving? The mediating roles of risk tolerance and risk perception

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Linh Thi My Nguyen ◽  
Phong Thanh Nguyen ◽  
Quynh Nguyen Nhu Tran ◽  
Thi Tuong Giang Trinh
Keyword(s):  
Risk Perception ◽  
Financial Literacy ◽  
Structural Equation ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Equation Modeling ◽  
Supporting Evidence ◽  
Negative Effects ◽  
Content Type ◽  
Retirement Saving

PurposeThe purpose of this study is to examine a mechanism through which subjective financial literacy can exert negative effects on the retirement saving intention and behaviors, which has not been well understood in prior research. Particularly, the authors draw on the relevant risk literature to introduce financial risk tolerance and risk perception as important mediators that transfer subjective financial literacy into reduced retirement saving intention which in turn affects the saving behaviors.Design/methodology/approachThe authors test the model with a sample of 347 adults using factor analysis and structural equation modeling.FindingsConsistent with the notions about the negative side of subjective financial literacy, the authors find supporting evidence for the proposed indirect effects of financial literacy on retirement saving intention via risk tolerance and risk perception. In addition, the authors observe that an individual's retirement saving intention strongly predicts their retirement saving behaviors.Originality/valueThe study offers insights into the mechanisms that subjective financial knowledge might also inhibit individual's responsible financial behaviors (e.g. retirement saving).

Personality, risk tolerance and social network use: an exploratory study

2016 ◽  
Vol 42 (6) ◽  
pp. 536-552 ◽  
Author(s):  
Shaista Wasiuzzaman ◽  
Siavash Edalat
Keyword(s):  
Social Networks ◽  
Social Network ◽  
Online Social Networks ◽  
Financial Risk ◽  
Ordinary Least Squares ◽  
Risk Tolerance ◽  
Network Activity ◽  
Least Squares Regression ◽  
Content Type ◽  
Financial Risk Tolerance

Purpose – The vast amount of information available via online social networks (OSN) makes it a very good avenue for understanding human behavior. One of the human characteristics of interest to financial practitioners is an individual’s financial risk tolerance. The purpose of this paper is to look at the relationship between an individual’s OSN behavior and his/her financial risk tolerance. Design/methodology/approach – The study uses data collected from a sample of 220 university students and the backward variables selection ordinary least squares regression analysis technique to achieve its objective. Findings – The results of the study find that the frequency of logging on to social network sites indicates an individual who has higher financial risk tolerance. Additionally, the increasing use of social networks for social connection is found to be associated with lower financial risk tolerance. The results are mostly consistent when the sample is split based on prior financial knowledge. Originality/value – To the authors’ knowledge this is the first study which documents the possibility of understanding an individual’s financial risk tolerance via his/her social network activity. This provides investment/financial consultants with more avenues for gathering information in order to understand their current or potential clients hence providing better services.

Process improvement approaches in emergency departments: a review of the current knowledge

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ana Vitória Lachowski Volochtchuk ◽  
Higor Leite
Keyword(s):  
Process Improvement ◽  
Thematic Analysis ◽  
Emergency Departments ◽  
Current Knowledge ◽  
Descriptive Analysis ◽  
Content Type ◽  
Quality Healthcare ◽  
Depth Analysis ◽  
Methodological Procedures ◽  
And Performance

PurposeThe healthcare system has been under pressure to provide timely and quality healthcare. The influx of patients in the emergency departments (EDs) is testing the capacity of the system to its limit. In order to increase EDs' capacity and performance, healthcare managers and practitioners are adopting process improvement (PI) approaches in their operations. Thus, this study aims to identify the main PI approaches implemented in EDs, as well as the benefits and barriers to implement these approaches.Design/methodology/approachThe study is based on a rigorous systematic literature review of 115 papers. Furthermore, under the lens of thematic analysis, the authors present the descriptive and prescriptive findings.FindingsThe descriptive analysis found copious information related to PI approaches implemented in EDs, such as main PIs used in EDs, type of methodological procedures applied, as well as a set of barriers and benefits. Aiming to provide an in-depth analysis and prescriptive results, the authors carried out a thematic analysis that found underlying barriers (e.g. organisational, technical and behavioural) and benefits (e.g. for patients, the organisation and processes) of PI implementation in EDs.Originality/valueThe authors contribute to knowledge by providing a comprehensive review of the main PI methodologies applied in EDs, underscoring the most prominent ones. This study goes beyond descriptive studies that identify lists of barriers and benefits, and instead the authors categorize prescriptive elements that influence these barriers and benefits. Finally, this study raises discussions about the behavioural influence of patients and medical staff on the implementation of PI approaches.

Antecedents to responsible financial management behavior among young adults: moderating role of financial risk tolerance

2020 ◽  
Vol 38 (5) ◽  
pp. 1177-1194 ◽  
Author(s):  
Dhananjay Bapat
Keyword(s):  
Young Adults ◽  
Financial Management ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Management Behavior ◽  
Content Type ◽  
Financial Risk Tolerance

PurposeThe study examines the antecedents of responsible financial management behavior among young adults in India and explores the role of financial risk tolerance as a moderating variable.Design/methodology/approachThe sample includes young adults in the age group of 18–35. The analysis uses a two-step approach via standard partial least squares structural modeling (PLS-SEM) and ordinary least square (OLS) regression.FindingsStructural modeling results show that financial attitude fully mediates the relationship between financial knowledge and responsible financial management behavior, and locus of control influences responsible financial management behavior. Financial risk tolerance moderates the relationship. Among demographic factors, age and occupation influence responsible financial management behavior.Research limitations/implicationsThe financial knowledge used in the survey are based on self-reported responses. The future study can include participants from both developed and emerging countries to assess similarities and differences.Practical implicationsDespite the growing focus on improving financial literacy, there are growing concerns regarding responsible financial behavior. Since financial services is related to fiduciary responsibility, managers and policymakers need to ensure that financial knowledge results in improving financial attitude, which further leads to responsible financial behavior.Originality/valueThe present study from an emerging country will add value to the literature.

Identification and prioritization of factors influencing organization risk tolerance level

2019 ◽  
Vol 16 (4) ◽  
pp. 417-435
Author(s):  
Mohammad Khalilzadeh ◽  
Shiba Masoumi ◽  
Isa Masoumi
Keyword(s):  
Decision Making ◽  
Risk Tolerance ◽  
Project Manager ◽  
Validity And Reliability ◽  
Statistical Population ◽  
Content Type ◽  
Tolerance Level ◽  
Factors Influencing ◽  
Critical Issues ◽  
Decision Making Model

Purpose Identifying and prioritizing the risks are considered as critical issues in risk management; otherwise, non-considering the risks will lead to the problems such as delays in project implementation, increased costs, loss of reputation, loss of clients, reduced revenue and liquidity and even bankruptcy. The paper aims to discuss these issues. Design/methodology/approach In this paper, the factors influencing the organization risk tolerance level were identified. Then, the factors increasing and decreasing the risk tolerance level were determined by a decision-making model. Finally, a comprehensive model was considered for risk measuring and preparing a risk failure structure chart, in order to determine the factors influencing it as well as the measurement criteria and then they were ranked using the taxonomy method. In this study, the size of the statistical population was 130 (six small and medium manufacturer and service provider companies). Based on Cochran’s sample size formula, 97 questionnaires containing 30 questions were randomly distributed among the population. Validity and reliability of the questionnaire were confirmed. The data were analyzed by SPSS 22. Findings Given the hypotheses of this study, the first hypothesis was rejected and the other hypotheses were accepted. The final ranking was done using the taxonomy method; the personality of the project manager was ranked at first; income, credit and capital were ranked second and the number of personnel was ranked third. Moreover, the TOPSIS method was used for ranking to compare the results. Originality/value In this research, the identification and ranking of these factors have taken place in several small- and medium-sized organizations; in addition, the rankings are conducted using the taxonomy decision-making method.

scholarly journals Intellectual capital disclosure practices of financial institutions in an emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Abdulla Al Mamun ◽  
Alima Aktar
Keyword(s):  
Financial Institutions ◽  
Intellectual Capital ◽  
Design Methodology ◽  
Stock Exchange ◽  
Emerging Economy ◽  
Content Type ◽  
Strategic Resources ◽  
Depth Analysis ◽  
External Capital ◽  
Practical Implications

Purpose The purpose of this study is to investigate the intellectual capital disclosure (ICD) practices of financial institutions in an emerging economy of Bangladesh. Design/methodology/approach Based on 93 items of intellectual capital categorized into internal capital, external capital and human capital, ICD index is developed for 53 financial institutions listed in Dhaka Stock Exchange. This study uses descriptive statistics to analyze ICD practices, and parametric and non-parametric tests to analyze the variation of ICD practices in terms of different categories as well as in terms of different sectors. Findings Results indicate that more than 70% of ICD items are generally not disclosed by financial institutions in Bangladesh. The highest of 36% of external capital disclosure items are disclosed, whereas the lowest of 18% of human resource capital elements are disclosed. Furthermore, results find the significant variability of ICD practices in terms of different intellectual capital categories and in between banking companies and non-banking financial institutions. Practical implications Findings have critical implications for managers, policymakers and regulators for setting appropriate strategies and regulations for improving the level of ICD, which, in turn, may reduce the information asymmetry problems of financial institutions as well. Originality/value In-depth analysis about variability of ICD practices creates value in the ICD literature by highlighting strategic priority of financial institutions to disclose information about the strategic resources in unique emerging economic settings such as Bangladesh.

Doing good across organizational boundaries

2018 ◽  
Vol 38 (12) ◽  
pp. 2389-2412 ◽  
Author(s):  
Hugo K.S. Lam
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Financial Risk ◽  
Theoretical Perspective ◽  
Secondary Data ◽  
Content Type ◽  
Signalling Theory ◽  
The Impact ◽  
Moderating Role

Purpose The purpose of this paper is to theoretically hypothesise and empirically test the impact of sustainable supply chain practices (SSCPs) on firms’ financial risk. Design/methodology/approach This research adopts signalling theory to explain the signalling role of SSCPs and the moderating role of the signalling environment in terms of supply chain characteristics. It collects and combines longitudinal secondary data from multiple sources to test the direct impact of SSCPs on firms’ financial risk and the moderating role of supply chain complexity and efficiency. It conducts various additional tests to check the robustness of the findings and to account for alternative explanations. Findings This research shows that SSCPs help firms reduce financial risk but do not affect their returns. Moreover, the risk reduction of SSCPs is greater for firms with more complex and efficient supply chains. The findings are robust to alternative variable measurements and analysing strategies. Research limitations/implications This research reveals the role of SSCPs in reducing financial risk, urging researchers to pay more attention to the financial risk implications of supply chain practices in general and SSCPs in particular. Practical implications This research encourages firms to engage in SSCPs to reduce financial risk and enables them to assess the urgency of their SSCPs investments in view of the complexity and efficiency of their supply chains. Originality/value This is the first research examining the impact of SSCPs on financial risk, based on longitudinal secondary data and signalling theory. The empirical evidence documented and the theoretical perspective adopted offer important implications for future practice and research on SSCPs.

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