scholarly journals Focal versus background goals in consumer financial decision-making

2015 ◽  
Vol 49 (7/8) ◽  
pp. 1114-1138 ◽  
Author(s):  
Jaakko Aspara ◽  
Amitav Chakravarti ◽  
Arvid O. I. Hoffmann
Keyword(s):  
Decision Making ◽  
Relevant Literature ◽  
Future Research ◽  
Individual Investors ◽  
Financial Returns ◽  
Trade Off ◽  
Content Type ◽  
Financial Decision Making ◽  
Goal Systems ◽  
Financial Decision

Purpose – This study aims to examine the interplay between focal and background goals in consumer financial decision-making and identify conditions that lead individuals to trade-off financial returns for background goals. Design/methodology/approach – The current research reviews the relevant literature on consumer financial decision-making and goal systems theory to develop a set of hypotheses that is tested using three experiments. Findings – The experiments show that individuals who have been subtly primed with self-expressive background goals, or experienced progress toward the focal goal of financial returns, accept lower financial returns for the opportunity to invest in stocks that allow for increased self-expression. Further, while subtly primed background goals exert a non-normative influence on investment decisions, explicit cues about an investment’s background goal-instrumentality create a backlash effect, and decrease individuals’ willingness to trade-off financial returns. Research limitations/implications – Future research could confirm the robustness of the findings of the present research by using different priming tasks and alternative ways of making the background goal explicit to individuals. Practical implications – To achieve greater attraction among individual investors, it helps to frame a financial product or stock in communications materials in a way that sends subtle signals with which investors can identify. Such signals could include stressing the product/company’s home country (addressing individuals’ patriotism) or a particular product domain (addressing individual investors’ desire for interesting/exciting current/future products). Originality/value – While previous research suggests that investment choices may be influenced by self-expressive motivations, to date, it remains unclear whether and when individual investors are actually willing to trade-off the focal goal of maximizing financial returns for the opportunity to satisfy alternative background goals.

The financial decisions of family businesses

2017 ◽  
Vol 7 (3) ◽  
pp. 351-373 ◽  
Author(s):  
Anna Motylska-Kuzma
Keyword(s):  
Decision Making ◽  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Future Research ◽  
Content Type ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
The Family ◽  
Financial Decision

Purpose The purpose of this paper is to examine the status, trends and potential future research areas in the field of financial decision-making process in family firms. Design/methodology/approach The bibliometric indicators and methods are applied in order to describe the publication activity and to analyze the contents of the articles. The material examined are the journals included in the SCOPUS, SAGE and EBSCO database and the peer-reviewed article, which contain in their titles, keywords or abstracts with a combination of phrases “family firms,” “family business” or “family enterprise” with “financial decision” or one of the subcategories: capital structure, investment decision, capital budgeting, working capital management or dividend policy. The study covers the period from 2000 to 2016. Findings Although the interest in family business research is growing rapidly, the area of financial decision making is underestimated. Despite of the fact that the vast majority of the studies into financial decisions in family firms is are focused on the capital structure, they do not give clear answers to the question of how the family businesses behave in this scope and what their true financial logic is. Additionally, the area of the investment decisions and dividend policy is rather not better left uncovered. Research limitations/implications The analyses enable the identification of potential avenues for future research which could be vital to make an advancement in the consolidation of the discipline. Practical implications The analyses ought to have a potential meaning mainly for external institutions (especially financial institutions) in better understanding of the family businesses and their point of view. Originality/value This paper fulfills the need of a comprehensive review of financial decision making process in family firms. It provides a literature review and bibliography for the period between 2000 and 2016 for the use of both academicians and practitioners.

Social and economic empowerment of women through financial inclusion: empirical evidence from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mukesh Pal ◽  
Hemant Gupta ◽  
Yogesh C. Joshi
Keyword(s):  
Decision Making ◽  
Social Welfare ◽  
Financial Inclusion ◽  
Rural India ◽  
Women Empowerment ◽  
Bank Account ◽  
Content Type ◽  
Financial Decision Making ◽  
Financial Decision ◽  
The Impact

PurposeWomen empowerment becomes an important policy discussion in development economics and modernization theory. The empowerment of women can lead to an increase in the quality viz-a-viz the capacity of human resources accessible for economic development. The purpose of this study is to evidence the impact of social and economic dimensions on women empowerment through financial inclusion in rural India.Design/methodology/approachTo reveal the research objective, the study has utilized a primary survey of women respondents from the Gujarat state of India by a simple random sampling method and applied a logistic regression approach to identify the relationship between the need of a bank account (determinant of financial inclusion) as a dependent variable and social and economic dimensions of women empowerment such as earning status, participation in financial decision-making, recipient of social welfare schemes and perception towards the safety of saving as independent variables.FindingsThe results of this study show that earning status, participation in financial decision-making at household level and recipient of social welfare schemes by women have a significant impact on women empowerment through financial inclusion; however, safety of their savings is observed as an insignificant variable, yet the odd value is very high (2.437) in the present study.Originality/valueThe present study is the first of its kind to examine the social and economic status of women and its impact on their requirement of a formal bank account for the overall empowerment of women in rural India.

Review of Family Financial Decision Making: Suggestions for Future Research and Implications for Financial Education

2017 ◽  
Vol 28 (2) ◽  
pp. 253-267 ◽  
Author(s):  
Jinhee Kim ◽  
Michael S. Gutter ◽  
Taylor Spangler
Keyword(s):  
Decision Making ◽  
Decision Process ◽  
Family System ◽  
Financial Education ◽  
Future Research ◽  
Financial Decisions ◽  
Individual Level ◽  
Financial Decision Making ◽  
Financial Decision ◽  
The Individual

This article reviews the theories and literature in intrahousehold financial decisions, spousal partners and financial decision making, family system and financial decision process, children, and financial decisions. The article draws conclusions from the literature review and discusses directions for future research and educational programs. Most financial education and counseling takes place at the individual level, whereas financial decisions take place at household and intrahousehold levels. Family members, spouses/partners, children, and others play a key role in individuals’ financial decisions. The article proposes the key programmatic implications for financial professionals and educators that need to be integrated into financial education and counseling. Understanding the unique dynamics of family financial decision making would help create effective educational and counseling strategies for the whole families.

Skills and household financial decision-making in Indonesia

2020 ◽  
Vol 47 (11) ◽  
pp. 1433-1450
Author(s):  
Arief Wibisono Lubis
Keyword(s):  
Decision Making ◽  
Cognitive Ability ◽  
Financial Literacy ◽  
Well Being ◽  
Microfinance Institutions ◽  
Content Type ◽  
Household Decision ◽  
Financial Decision Making ◽  
Household Decision Making ◽  
Financial Decision

PurposeThis study examines whether financial literacy is a relevant factor that determines authority in household financial decision-making, an area that is often viewed as boring, difficult and full of uncertainties. Cognitive ability and personality traits are also included as additional explanatory variables.Design/methodology/approachThe logistic regression technique was applied using a sample of more than 2,300 microfinance institutions' clients in three provinces in Indonesia.FindingsThis study finds that financial literacy correlates positively with authority in household financial decision-making only among men. This does not mean that financial literacy is irrelevant for women's agency, since the skill might be important for authorities in other decision-making areas, including those outside households. Meanwhile, the relationship between cognitive ability and household financial decision-making authority is more universal.Research limitations/implicationsThis study does not collect information on the levels of financial literacy of other household members and does not capture respondents' perceptions of household financial decision-making.Social implicationsThe overall low level of financial literacy calls for the need for more targeted efforts to address this issue by policymakers. Education policy should also be designed to improve cognitive ability, as this ability is important for human agency and well-being.Originality/valueHousehold decision-making has received significant attention in the literature. Authority in household decision-making is important because it represents a person's agency and has a profound impact on well-being. To the best of author's knowledge, studies on the importance of skills in household financial decision-making are very limited.

Perfectionist decision-making style and ethical investment willingness

2018 ◽  
Vol 56 (3) ◽  
pp. 534-549 ◽  
Author(s):  
Yu-Cheng Lin ◽  
Chiung-Yao Huang ◽  
Yu-Shan Wei
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Investment Decision ◽  
Moral Intensity ◽  
Equation Modeling ◽  
Individual Investors ◽  
Ethical Investment ◽  
Financial Returns ◽  
Content Type ◽  
Ethical Investments

Purpose The purpose of this paper is to examine the ethical investment willingness decision-making process to understand how investors evaluate corporate social responsibility (CSR) actions. Design/methodology/approach Data were collected through a survey of 298 individual investors and analyzed using structural equation modeling. Findings Results reveal that perfectionist decision-making style is positively related to perceived moral intensity, substitutability of financial returns, and ethical investment willingness. In addition, perceived moral intensity and substitutability of financial returns are positively related to ethical investment willingness. Finally, perceived moral intensity is positively related to substitutability of financial returns, and a two-factor causal mediation model is supported. Research limitations/implications The limitation of this study was that the pre-tests and sampling methods required all participants to have investing experience; however, procurement of trading information for each investor was impossible; thus, actual investment behaviors were undetermined. This study shed light on the mediating roles of perceived moral intensity and the substitutability of financial returns. Future studies can further investigate the factors influencing perceived moral intensity and the substitutability of financial returns. Practical implications Future ethical investment education can focus on cultivate the ability to distinguish ethical investments and change ethical investment willingness into actual investment behavior. Originality/value Understanding the relationship between these variables can help understand why ethical investment willingness varies among investors and how the traditional financial theory investment decision model should be revised as, internationally, more people have begun to observe CSR and sustainable development.

Attitude for inclusive finance: influence of owner-managers’ and firms’ characteristics on SMEs financial decision making

2019 ◽  
Vol 35 (3) ◽  
pp. 158-171 ◽  
Author(s):  
Rabia Rasheed ◽  
Sulaman Hafeez Siddiqui
Keyword(s):  
Decision Making ◽  
Risk Factor ◽  
Partial Least Square ◽  
Least Square ◽  
Equation Modeling ◽  
Firm Characteristics ◽  
Content Type ◽  
Financial Decision Making ◽  
Financial Decision ◽  
The Relationship

Purpose The adoption and use of financial services by small- and medium-sized enterprises (SMEs) are pivotal in the development of inclusive financial markets. The purpose of this paper is to examine the influence of attitude on financial decision making of SMEs owner-manager. The attitude of SMEs owner-manager comprises of several factors; however, current study identifies few critical factors such as motivation, awareness and risk in the context of Pakistan. The study also includes the personal and firm characteristics as moderating variables to examine their effect on the relationship between attitude and financial decision making of owner-managers. Design/methodology/approach With the help of a structured questionnaire, total 285 valid responses are analyzed to accomplish the research objectives. The study uses SPSS and partial least square-structural equation modeling techniques in order to conduct analysis. The results of study highlight the importance of attitudinal factors such as awareness and risk. Moreover, the moderating effect of personal characteristics on the relationship between attitude and financial decision making has been found strong instead of firm characteristics. Findings The results show that the low awareness level of owner-managers regarding financial products and procedures significantly affects their attitude. Moreover, the less knowledge of financing terms as well as dominant role of owner-managers in taking firm decisions also increase the negative effect of risk factor on SMEs owner-manager attitude. Research limitations/implications The study suggested that policy makers should focus on the financial awareness of SMEs owner-manager to reduce the negativity of risk factor. Originality/value The study contributes toward the literature of inclusive finance and sustainability studies through better understanding of financial decision making of SMEs in emerging economies.

Entrepreneurship development and financial literacy in Africa

2015 ◽  
Vol 11 (4) ◽  
pp. 281-294 ◽  
Author(s):  
Habib Auwal Abubakar
Keyword(s):  
Decision Making ◽  
Gender Gap ◽  
Financial Literacy ◽  
Business Environment ◽  
Literacy Skills ◽  
Access To Finance ◽  
Content Type ◽  
Entrepreneurship Development ◽  
Financial Decision Making ◽  
Financial Decision

Purpose – The purpose of this paper is to analyse the level of financial literacy in Africa based on previous studies and evidence from financial literacy surveys, with the aim of establishing how financial literacy impacts entrepreneurship development in Africa. The study specifically looks at how financial literacy affects the household behaviour regarding financial decision making, as well as the gender gap in financial literacy. As financial literacy is gaining momentum both in developed economies with sophisticated financial systems and developing countries with low levels of financial services, this research seeks to establish a formal relationship between financial literacy and access to finance and what impact both have for developing an entrepreneurship society in Africa. It also focuses on the relationship between financial decision making and gender as well as access to finance with the aim of carefully examining the implications on entrepreneurship development. Design/methodology/approach – To attain the above objective, the study employed a mixed methodology research design where both quantitative and qualitative methods were used. A survey method on financial literacy, conducted by: (Finscope, OECD) was thoroughly analysed in addition to previous work on entrepreneurship development, financial literacy, access to finance and poverty reduction in Africa. Findings – The results show that the difficulties in access to finance, access to market, policy support and entrepreneurship culture are the main problems and constraints on entrepreneurship development in Africa which has a very strong implication for financial literacy on the continent particularly on micro, small and medium enterprises. Other important problems include unfavorable investment climate, absence of entrepreneurship training programmes, unfriendly investment business environment, gender gap and lack of value chain in the entrepreneurship ecosystem. Research limitations/implications – The paper is limited to the established survey and mainly concentrates on Africa. Practical implications – African governments and other development partners should re-evaluate their intervention programmes to strengthen financial literacy skills while simultaneously supporting entrepreneurship development by promoting an entrepreneurship culture through the right policy that will actively stimulate the development of entrepreneurs that will contribute to entrepreneurship ecosystems and ultimately enhance Africa’s economic development. Originality/value – This paper aims at enhancing understanding of entrepreneurship development and financial literacy in Africa and will help policy makers and researcher fill the missing gap between financial literacy and entrepreneurship education. The recommendations made could significantly boost entrepreneurship activities as well as enhance financial literacy skills in the region, which can as well help increase access to finance on the continent.

scholarly journals Individual Investors' Financial Behaviour and Financial Attitude: Role of Financial Literacy as Moderator in Decision Making

2021 ◽  
Vol VI (I) ◽  
pp. 200-213
Author(s):  
Sadaf Ambreen ◽  
Laiba Khalid ◽  
Aniqa Zubair
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Management ◽  
Individual Investors ◽  
Individual Investor ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Financial Management System

As an individual investor, it is incredible to have a successful performance return without financial knowledge. An organization's performance must be measured and analysed based on an adequate financial management system. In today's multifaceted financial scenery Financial Literacy is crucial as it does not only impact financial decisions at the business level but is also important for the country's development. Financial literacy has the importance of the backbone of society. The study adds a new mechanism of financial literacy. The main objective of this study is to determine further insight into the role of financial literacy on an individual's behaviour and attitude towards financial decision making. For analysis, the moderator impact of financial literacy on decision-making data of 100 individual investors has been collected from different banking sectors of Pakistan. The result of this study shows that financial literacy has a significant impact on financial decision making. This study delivers knowledge that can contribute to guiding coming studies, making policies, directors and instructors in their teaching.

Integrating affect, cognition, and culture in Hispanic financial planning

2018 ◽  
Vol 36 (4) ◽  
pp. 726-743 ◽  
Author(s):  
Suri Weisfeld-Spolter ◽  
Fiona Sussan ◽  
Cindy Rippé ◽  
Stephen Gould
Keyword(s):  
Decision Making ◽  
Cultural Values ◽  
Financial Planning ◽  
Financial Knowledge ◽  
Cultural Value ◽  
Equation Modeling ◽  
Data Set ◽  
Content Type ◽  
Financial Decision Making ◽  
Financial Decision

PurposeDebt is at a peak and consumers purport needing help with financial planning. To better understand the antecedents of financial planning behavior, the purpose of this paper is to examine the importance of cultural values in financial decision making within the context of Hispanic American consumers. A new conceptual model is proposed to integrate affect (cultural value) and cognition (financial knowledge) in financial planning.Design/methodology/approachTo uncover respondents’ views on cultural values, financial knowledge, financial attitude, and financial planning behavior, an online survey hosted on a business school’s website was distributed to members of two Hispanic Chambers of Commerce. The survey consisted of five parts, and took each respondent an average of 15 minutes to complete. The final data set has 158 observations.FindingsResults analyzed using structural equation modeling confirmed the hypotheses that financial knowledge, attitude, and perceived control simultaneously influence Hispanic consumers’ intentions to purchase financial planning products or services. More interestingly, these results confirm that multiple different routes coexist in the decision-making process, especially within the Hispanic financial planning context.Originality/valueKey contributions of this paper include the conceptualization of cultural value as an antecedent to Hispanic financial behavior; detailing the different routes to financial decision making for US Hispanic consumers; and informing financial service managers on marketing strategies toward Hispanic consumers.

The UAE Islamic Bank

2011 ◽  
Vol 1 (1) ◽  
pp. 1-4
Author(s):  
Hela Miniaoui
Keyword(s):  
Decision Making ◽  
Learning Outcomes ◽  
Financial Analysis ◽  
Subject Area ◽  
Financial Instruments ◽  
Content Type ◽  
Financial Decision Making ◽  
Islamic Bank ◽  
Financial Decision ◽  
The Right

Subject area Islamic financial instruments, financial analysis, financial decision making. Study level/applicability Undergraduate Finance and Business. Case overview This case highlights the financial decision making by the UAE Islamic Bank, regarding an investment with Towers company. It focuses on considering the appropriate Islamic mode of financing and computing the relevant financial ratios to make the right decision. Expected learning outcomes This case can be used to teach Islamic financial instruments, financial analysis and financial decision making. Supplementary materials A teaching note is available on request.

Sign in / Sign up

Export Citation Format

Share Document