scholarly journals An empirical evaluation of tech interventions to improve financial decision-making

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francesco Tommasi ◽  
Andrea Ceschi ◽  
Joshua Weller ◽  
Arianna Costantini ◽  
Giulia Passaia ◽  
...  
Keyword(s):  
Decision Making ◽  
Technology Acceptance ◽  
Empirical Evaluation ◽  
Training Group ◽  
Control Group ◽  
Computer Supported Collaborative Learning ◽  
Content Type ◽  
Financial Decision Making ◽  
Technological Interventions ◽  
Financial Decision

Purpose This paper aims to empirically compare the degree to which two technological interventions, based on the computer-supported collaborative learning (CSCL) and the technology acceptance model (TAM), were associated with a different incidence of financial biases. Design/methodology/approach The study adopted a quasi-experimental research design. The authors randomly assigned the participants (N = 507) to one of two training conditions or a control group, and in turn, we assessed the incidence of financial biases after the training interventions. Findings Participants who took part in the TAM-based group reported lower financial biases than those in the CSCL-based training group and the control group. Research limitations/implications Literature suggests that two educational approaches, i.e. the CSCL and the TAM, can implement individuals’ financial decision-making. These educational approaches involve technology to support individuals in reducing the incidence of cognitive biases. This study contributes by advancing empirical evidence on technological supports for interventions to improve financial decision-making. Practical implications Suboptimal decision-making may lead to adverse consequences both at the individual and social levels. This paper contributes to the literature on debiasing interventions by offering initial evidence on technological-based interventions in the domain of financial decision-making. The authors discuss the application of this evidence in lifelong training. Originality/value This study provides evidence on how different technological interventions are associate with a lower incidence of financial biases.

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.

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.

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.

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.

scholarly journals Financial Decision Making Under Stress

2021 ◽  
Author(s):  
◽  
Narek Bejanyan
Keyword(s):  
Decision Making ◽  
Treatment Group ◽  
Cold Pressor Test ◽  
Group Versus ◽  
Cold Pressor ◽  
Control Group ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Safe Level ◽  
Financial Decision

The aim of this paper is to examine the link between individuals' financial decisions and stress. In a laboratory experiment, Holt and Laury lottery was used to elicit participants risk preferences. The Cold Pressor Test was used to induce a safe level of stress. In the treatment group, 62% of participants are risk averse; versus 76% in the control group. Additionally, inconsistent financial decision making was observed in both groups: 55% of participants in the treatment group versus 30% in the control.

Zimbabwe’s vice president could be sidelined by party

2017 ◽  
Keyword(s):  
Decision Making ◽  
Foreign Investment ◽  
Vice President ◽  
Economic Uncertainty ◽  
Short Term ◽  
Content Type ◽  
Financial Decision Making ◽  
Finance Minister ◽  
Financial Decision ◽  
Robert Mugabe

Subject ZANU-PF infighting. Significance A cabinet reshuffle by President Robert Mugabe on October 9 removed key allies of Vice President Emmerson Mnangagwa and demoted him to vice president without portfolio. Among persistent wrangling between the rival ‘G40’ and ‘Lacoste’ factions ahead of the 2018 elections, the ZANU-PF politburo has agreed to hold a ‘Special Congress’ in December at which there will be elections for senior posts. If the extraordinary congress is held, Mnangagwa could be the biggest leadership casualty. Impacts Confirmation of an early poll would cause heightened economic uncertainty and deter foreign investment in the short term. More centralised and politically motivated financial decision-making is likely under the new finance minister. Minister of Defence Sydney Sekeramayi could emerge as a potential presidential successor for the ailing 93-year-old Mugabe.

A survey on national culture and corporate financial decisions: current status and future research

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Kutan ◽  
Usama Laique ◽  
Fiza Qureshi ◽  
Ijaz Ur Rehman ◽  
Faisal Shahzad
Keyword(s):  
Decision Making ◽  
National Culture ◽  
Significant Role ◽  
Investment Efficiency ◽  
Content Type ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Extant Literature ◽  
Financial Decision

PurposeThe extant literature provides substantial evidence that various facets of national culture play a significant role in corporate financial decision making. We systematically review the role of national culture on the various thematic domains of corporate financial decision making to outline what have been studies thus far and what needs to be studied.Design/methodology/approachKeywords such as national culture, organizational culture, power distance, uncertainty avoidance, masculinity, risk aversion and individualism for a search in the prominent academic literature databases are used. The studies related to the corporate financial decision making that is tied with these keywords are identified and selected for the systematic review.FindingsThe review of extant literature suggests strong evidence that national culture has a significant role in influencing corporate cash holding, corporate risk-taking, individual behaviour of the financial managers and initial public offering by the corporations. The review also indicates, although extant studies have examined the role of national culture in the key corporate financial decisions, evidence on the role of national culture in the firm's investment efficiency aspects is rather scarce. Also, what explains the role of national culture in corporate financial decision making has not been empirically exploited through causal mechanisms.Practical implicationsThe findings of the studies help advance our understanding of the current research status concerning the role played by the national culture in shaping corporate financial decisions and raise important future calls.Originality/valueTo best of our knowledge, no prior study has systematically reviewed the role of national culture in the thematic domains of corporate financial decision making.

The effects of mental budgeting and pain of payment on the financial decision making of socially excluded people

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sungyong Chun ◽  
Devon S. Johnson
Keyword(s):  
Decision Making ◽  
High Risk ◽  
Social Exclusion ◽  
Financial Education ◽  
Mediating Effect ◽  
Content Type ◽  
Financial Decision Making ◽  
Financial Products ◽  
Financial Decision ◽  
Mental Budgeting

PurposeConsumers who experience social exclusion often prefer high-risk financial products over low-risk financial products. The aim of this study is to examine how this effect can be attenuated by applying the theories of mental budgeting and pain of payment. The authors’ aim in pursuing this research is to improve the effectiveness of financial professionals and others in educating consumers on healthy financial practices. Understanding how social exclusion experiences influence financial decision-making is essential for continued progress in consumer financial education.Design/methodology/approachThe authors examine the effect of consumers experiencing social exclusion on preference for high-risk financial products using an experimental design involving the manipulation of social exclusion/inclusion experiences. Data were collected from 148 consumers of mutual fund investment services via Amazon Mechanical Turk.FindingsThe study found that consumers experiencing social exclusion are more likely to make high risk investments. It also found that this effect is moderated by consumers' level of mental budgeting such that at high levels of mental budgeting the effect of social exclusion on investment choice is attenuated. The study further finds that the moderating effect of mental budgeting is mediated by pain of payment.Social implicationsThe findings of this study suggest that policymakers can reduce unduly risky personal investment behavior by triggering mental budgeting thoughts using methods such as advertising and explicit mention of transaction fees.Originality/valueThe present study builds on existing research demonstrating the adverse behavioral consequences of social exclusion but refines our understanding by demonstrating the attenuating effect of mental budgeting and the mediating effect of pain of payment on high risk financial purchases.

Sign in / Sign up

Export Citation Format

Share Document