Moderating influence of advisor personality on the association between financial advice and investor stock trading behavior

2018 ◽  
Vol 36 (5) ◽  
pp. 947-968 ◽  
Author(s):  
Muhammad Zubair Tauni ◽  
Muhammad Ansar Majeed ◽  
Sultan Sikandar Mirza ◽  
Salman Yousaf ◽  
Khalil Jebran
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Financial Services ◽  
Least Square ◽  
Trading Behavior ◽  
Stock Trading ◽  
Content Type ◽  
Trading Frequency ◽  
Financial Advice ◽  
The Impact

Purpose The purpose of this paper is to investigate the role of financial advice on investor trading behavior by analyzing the influence of advisor personality. Design/methodology/approach The study utilized the Big Five personality framework from Costa and McCrae (1992) to measure personality traits of advisors and examined the data collected from 314 stock investor–advisor dyads. Personality traits of advisors were measured by the NEO-Five Factor Inventory (Costa and McCrae, 1989). Confirmatory factor analysis was conducted to assess the fitness of the Big Five model. We followed two-stage least square method for estimating endogenous covariate by employing instrumental variable analysis. Probit model was used to evaluate the moderating influence of advisor personality traits on the association between the usage of financial advice and trading behavior. Findings The authors found that financial advice positively impacts investors’ stock trading frequency. The authors also provide empirical evidence that financial advice is more likely to increase trading frequency when advisor personality tends to be openness, conscientiousness and agreeableness. On the other hand, information acquired from financial advisors causes fewer adjustments in investors’ portfolios when the personality of advisors is likely to be extraverted and neurotic. Research limitations/implications The theoretical model in our study seeks to explain that a psychological factor, namely, advisor personality, influences the way an investor interprets information signals from financial advice, which, in turn, influences the investor’s decision to trade in securities. Practical implications This research suggests that characteristics of advisors other than those of investors can be of relevance for policy makers in their attempts to improve their business in the financial services industry. Originality/value Survey-based studies in finance are lacking. This study adds to the existing literature of behavioral finance that accounts for the observed variations in investors’ financial decision making explained by psychological factors. No previous study has been conducted so far exploring variations in the impact of financial advice on investors’ stock trading behavior by the Big Five advisor personality, and this paper strives to fill this research gap in Chinese stock market.

Information sources and trading behavior: does investor personality matter?

2016 ◽  
Vol 8 (2) ◽  
pp. 94-117 ◽  
Author(s):  
Muhammad Zubair Tauni ◽  
Hong Xing Fang ◽  
Amjad Iqbal
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Futures Market ◽  
Equation Modeling ◽  
Big Five Personality ◽  
Sources Of Information ◽  
Trading Behavior ◽  
Content Type ◽  
Trading Frequency ◽  
The Impact

Purpose This paper aims to investigate the impact of sources of information on trading behavior by analyzing the influence of investor personality in Chinese futures market. Design/methodology/approach The authors adopted the Big Five personality framework and examined the survey results of individual investors (n = 333) in Chinese futures market. Personality traits of futures investors were measured by the NEO-Five Factor Inventory (Costa and McCrae, 1989) which is a shortened version of revised NEO personality inventory of the Big Five model (Costa and McCrae, 1992). Confirmatory factor analysis was conducted to assess the fitness of model. Structural equation modeling was used to evaluate the moderating influence of investor personality traits on the association between source of information and trading behavior. Findings The results confirm the previous findings that the sources of information used by investors as a foundation of their financial choices have a significant impact on trading frequency. The authors also provide an empirical evidence that investor personality traits moderate the relationship between sources of information and trading behavior. Financial advice from professionals is likely to increase trading frequency in investors with neuroticism and openness personality traits, and to reduce trading frequency in conscientious and extravert investors. Similarly, financial information acquired via word-of-mouth communication results in more trading in extravert and agreeable investors. Finally, information acquisition from specialized press causes more adjustment of conscientious investors’ portfolios. Theoretical explanations, implications and recommendations for future research are discussed. Originality/value This study combines information search and behavioral finance literature to demonstrate that the impact of various sources of market information on asset allocation decisions is influenced by investor personality. No previous study has been conducted yet to explain variations in the impact of sources of information on trading behavior by the Big Five personality traits and this paper seeks to fill this gap in Chinese futures market.

Does investor personality moderate the relationship between information sources and trading behavior? Evidence from Chinese stock market

2017 ◽  
Vol 43 (5) ◽  
pp. 545-566 ◽  
Author(s):  
Muhammad Zubair Tauni ◽  
Zia-ur-Rehman Rao ◽  
Hong-Xing Fang ◽  
Minghao Gao
Keyword(s):  
Stock Market ◽  
Personality Traits ◽  
Chinese Stock Market ◽  
Sources Of Information ◽  
Trading Behavior ◽  
Content Type ◽  
Trading Frequency ◽  
Word Of Mouth Communication ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the impact of the key sources of information, namely, financial advice, word-of-mouth communication and specialized press, on trading behavior of Chinese stock investors. The study also analyzed if the association between the key sources of information and trading behavior is influenced by investor personality. Design/methodology/approach The authors adopted the Big Five personality framework and examined the survey results of individual stock investors (n=541) in China. Personality traits of investors were measured by the NEO-Five Factor Inventory (Costa and McCrae, 1989). The authors performed probit regression analysis to evaluate the moderating influence of investor personality traits on the association between sources of information and stock trading behavior. Findings The results of the study confirm the previous findings that the key sources of information used by investors as a foundation of their financial choices have a significant influence on their trading behavior. The study also provides empirical evidence that investor personality traits moderate the relationship between the key sources of information and trading behavior. Financial advisors tend to increase the frequency of trading in investors with openness, extraversion, neuroticism and agreeableness personality traits, and tend to decrease the intensity of trading in investors with conscientiousness trait. On the other hand, financial information acquired from word-of-mouth communication is more likely to enhance trading frequency in extraverted and agreeable investors, and is more likely to reduce trading frequency in investors with openness, conscientiousness and neuroticism traits. Finally, the use of specialized press leads to more adjustment in portfolios of the investors with openness and conscientiousness traits than those with other personality traits. An alternative mediated model was not supported. Originality/value This research contributes to information search literature and behavioral finance literature and provides empirical evidence that the psychological characteristics of investors are significant predictors of the variations in information-trading link. The study offers new theoretical insights of investors’ behavior due to the characteristics of Chinese stock market which are unique from other stock markets in the world. To the authors’ best knowledge, no previous study has been conducted so far in Chinese stock market to explore variations with regards to the impact of the key sources of information on trading behavior by the Big Five investor personality and this paper seeks to fill this gap.

Do investor’s Big Five personality traits influence the association between information acquisition and stock trading behavior?

2017 ◽  
Vol 7 (4) ◽  
pp. 450-477 ◽  
Author(s):  
Muhammad Zubair Tauni ◽  
Zia-ur-Rehman Rao ◽  
Hongxing Fang ◽  
Sultan Sikandar Mirza ◽  
Zulfiqar Ali Memon ◽  
...  
Keyword(s):  
Stock Market ◽  
Personality Traits ◽  
Big Five ◽  
Information Acquisition ◽  
Big Five Personality Traits ◽  
Big Five Personality ◽  
Chinese Stock Market ◽  
Trading Behavior ◽  
Stock Trading ◽  
Content Type

Purpose The purpose of this paper is to investigate the impact of the frequency of information acquisition on the frequency of stock trading. The authors also examined if the Big Five personality traits of investor influence the association between information acquisition and stock trading behavior. Design/methodology/approach The authors adopted NEO Five-Factor Inventory (Costa and McCrae, 1989) inventory to measure the Big Five personality traits of investors and examined the data collected from 541 individual investors of the Chinese stock market. To overcome the potential endogeneity bias, the authors followed two-stage least square method for estimating endogenous covariate by employing instrumental variable analysis. The authors performed probit regression to evaluate the moderating influence of investor personality traits on the association between information acquisition and stock trading behavior. The authors also performed several other tests to check the robustness of the key findings. Findings This research confirmed the previous findings that the more frequently investors acquire information, the more often they trade in stocks. Moreover, the authors added to the existing literature by providing empirical evidence that the Big Five personality traits moderate the relationship of information acquisition with stock trading behavior. Information acquisition tends to increase stock trading frequency in investors with conscientiousness, extraversion and agreeableness traits. On the other hand, it also has the tendency to decrease the intensity of stock trading in investors with openness and neuroticism traits. Research limitations/implications The theoretical model in this study seeks to explain that the psychological factor, namely, investor personality, influences the way an investor interprets signals from information which in turn influences the investor decision to trade in securities. This research suggests that psychological characteristics of investors can be of relevance for policy makers in their attempts to improve their business in the financial services industry. Originality/value This study combines both information search literature and behavioral finance literature to investigate whether or not the information acquisition that relates to investors’ asset allocation decisions is influenced by investor personality. The study offers new theoretical insights into investors’ behavior due to the characteristics of the Chinese stock market which are uniquely different from other stock markets in the world. No previous study has been conducted so far in the Chinese stock market to explore variations in the impact of investors’ information acquisition on their stock trading by the Big Five personality and this paper strives to fill this research gap.

How do personality traits affect visitor’s experience, emotional stimulation and behaviour? The case of wine tourism

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ifigeneia Leri ◽  
Prokopis Theodoridis
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Holistic Approach ◽  
Big Five Personality Traits ◽  
Big Five Personality ◽  
Content Type ◽  
Wine Tourism ◽  
Revisit Intentions ◽  
The Impact

Purpose The purpose of this study is to investigate the moderation effects of the Big Five personality traits on the relationships between holistic experience constructs (i.e. servicescape and other visitors’ behaviours), emotional responses and revisit intention in the context of winery visitation experiences in Greece. Design/methodology/approach The study adopts a holistic approach to visitor experience and suggests that visitors base their experience perception on the servicescape’s attributes and other visitors’ suitable behaviours. Path analysis was adopted to measure the impact of these constructs on visitors’ emotions and the role these emotions play in predicting visitors’ revisit intentions. The moderation effect of the Big Five personality traits in such relationships was examined using the SPSS PROCESS. A self-administered, highly structured questionnaire was distributed to winery visitors in Greece; a total of 615 responses were used in data analysis. Findings The results indicate that all the examined relationships become stronger as a result of visitors having high or average scores for openness, extraversion, agreeableness and conscientiousness, or low scores for neuroticism. Research limitations/implications The findings enhance the existing literature pertaining to experiential marketing, wine tourism marketing and the role of personality in tourism by providing new insights. Practical implications The overall findings may benefit wineries in their efforts to carry out the following: increase visitors’ revisit intentions; design and manage the winery environment and the winery experience effectively; and design marketing strategies. Originality/value The paper’s originality lies in providing information to clarify the role of visitors’ personalities as a contributing factor to their emotional stimulation and their revisit intentions in terms of both constructs of experience (i.e. servicescape and other visitors’ behaviours). Furthermore, this study attempts to respond to recent calls to conduct multidimensional research on the servicescape construct, focusing on both the substantive staging of the servicescape and the communicative staging of the servicescape. Finally, the present study provides new and practical insights regarding the winery experience in the Greek context – an area where very limited research has been conducted so far.

scholarly journals Pengaruh Moderasi Kepribadian (Big Five Personality) Terhadap Hubungan Akuisisi Informasi dan Perilaku Perdagangan Saham Pada Investor Muda di Indonesia

2019 ◽  
Vol 19 (2) ◽  
pp. 82
Author(s):  
Chentya Novianty ◽  
Maria C. Widyaastuti
Keyword(s):  
Big Five ◽  
Analytical Method ◽  
Information Acquisition ◽  
Positive Relationship ◽  
Big Five Personality ◽  
Trading Behavior ◽  
Stock Trading ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

<p><strong>Abstrak</strong></p><p><strong>Tujuan </strong>- Penelitian ini bertujuan untuk menganalisis dampak frekuensi akuisisi informasi pada frekuensi perdagangan saham yang dimoderasikan oleh Kepribadian (Big Five Personality).</p><p><strong>Desain/Metodologi/Pendekatan - </strong>Data diperoleh langsung melalui penyebaran kuesioner kepada 304 responden yaitu investor muda (berusia 21 sampai 30 tahun) di Indonesia. Rancangan penelitian yang digunakan dalam penelitian ini adalah Pengujian Hipotesis. Metode analisis yang digunkanan dalam penelitian ini Ordinal Logistic Regresion dengan menggunakan program SPSS.</p><p><strong>Hasil Penelitian</strong> -  Hasil dari penelitian ini adalah terdapat hubungan pada akuisisi informasi dan perilaku perdagangan saham, Investor yang tergolong Openness &amp; Neuroticism akan memperlemah hubungan kedua variabel tersebut, sedangkan Conscientiousness, Extraversion dan Agreeableness akan memperkuat hubungan kedua variabel tersebut.</p><p><strong><em><br /></em></strong></p><p><strong><em>Abstract</em></strong></p><p> </p><p><strong><em>Purpose </em></strong><em>–</em><em>This paper was to investigate the impact of the frequency of information acquisition on the  frequency of stock trading</em></p><p><strong><em>Des</em></strong><strong><em>ign</em></strong><strong><em>/Met</em></strong><strong><em>hodology</em></strong><strong><em>/</em></strong><strong><em>Approach </em></strong><em>–</em><em> Data </em><em>obtained directly by distributing questionnaires to 304 respondents is young investors (aged 21 to 30 years) in Indonesia. The research design used in this study is hypothesis testing. The analytical method used in this research is Ordinal Logistic Regresion using SPSS program.</em></p><p><strong><em>Findings - </em></strong><em>The results of this study were that there is a positive relationship between information acquisition and trading behavior. Investors belonging to Openness &amp; Neuroticism will weaken the relationship of both variables, while Conscientiousness, Extraversion and Agreeableness will strengthen the relationship of both variables.</em></p><p> </p>

Hide and seek – the role of personality, sense of coherence and experiential information in hidden information needs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jannica Heinström ◽  
Shahrokh Nikou ◽  
Eero Sormunen
Keyword(s):  
Personality Traits ◽  
Sense Of Coherence ◽  
Structural Equation ◽  
Information Needs ◽  
Partial Least Square ◽  
Least Square ◽  
Psychological Wellbeing ◽  
Content Type ◽  
The Impact ◽  
Concealed Information

PurposeThe aim of this study is to assess the impact of personality traits and sense of coherence (SOC) on concealing information needs out of shame. The study also investigates the link between concealed information needs and the use of experiential information for psychological wellbeing.Design/methodology/approachA Partial Least Square ‐ Structural Equation Modelling (PLS-SEM) approach is used to assess and analyse the proposed conceptual model, which is based on the responses of 412 upper secondary school students.FindingsThe findings reveal that personality traits not only have direct significant effects on concealing information needs but that their effects are also mediated by SOC. The positive relationship between concealed information needs and the use of experiential information is confirmed in the study.Originality/valueThis study is the first to show that personality and SOC influence concealing information needs. Two pathways are found. Firstly, negative emotionality and a low SOC lead to a heightened sense of shame. Secondly, introversion induces a more guarded behaviour. The study, moreover, quantitatively demonstrates a link between concealed information needs and the use of experiential information for psychological wellbeing.

Personality traits and investor sentiment

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
H. Kent Baker ◽  
Satish Kumar ◽  
Nisha Goyal
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Structural Equation ◽  
Investor Sentiment ◽  
Equation Modeling ◽  
Individual Investors ◽  
Content Type ◽  
Behavioral Biases ◽  
Big Five Model ◽  
The Impact

Purpose This paper examines the relation between the Big Five model of personality traits and behavioral biases (overconfidence, disposition effect, anchoring, representativeness, metal accounting, emotional bias and herding) of Indian individual investors when making investment decisions. Design/methodology/approach The authors use a structured questionnaire to obtain responses from 515 stock investors in India between August 2016 and January 2017. Based on components identified through factor analysis, the authors use structural equation modeling to examine the effect of specific personality traits. Findings The findings indicate a significant association between the traits of neuroticism, extroversion and conscientiousness as well as behavioral biases of individual investors. Openness has a significant relation with only mental accounting and the agreeableness trait has no relation with the behavioral biases examined. Research limitations/implications The findings imply that understanding investor personality differences and investment psychology can help financial advisors and wealth managers modify products and services to better suit client needs. Originality/value To the best of the authors’ knowledge, no previous study has examined the impact of the Big Five model of personality traits on various behavioral biases among Indian investors.

Personality traits as an engine of knowledge: a quantile regression analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michael Polemis
Keyword(s):  
Personality Traits ◽  
Big Five ◽  
Nonlinear Effects ◽  
Noncognitive Skills ◽  
Content Type ◽  
Level Of Education ◽  
Quantile Regression Analysis ◽  
Education Decision ◽  
The Impact

PurposeWe use disaggregated survey data set to investigate the impact of personality traits on the level of education in the USA. We attempt to shed light on the contribution of each of the Big Five personality traits on the education decision made by the individuals.Design/methodology/approachWe use the quantile regression analysis in order to investigate to what extent certain aspects of personality may help an individual to invest in education.FindingsOur findings uncover a significant effect of noncognitive skills on the level of education. It is shown that people with high emotional stability and agreeableness invest in human capital, especially when we move to the higher quantiles of the conditional distribution function. Moreover, we argue that the estimated signs of the traits remain stable across the quantiles, while the relevant curvatures indicate for the first time in the empirical literature, the presence of nonlinear effects. Last, our model survived robustness checks under the inclusion of two aggregated higher-order factors, namely “Alpha” and “Beta.”Research limitations/implicationsAlthough we used several control variables (e.g. Gender, Age) to address the impact of noncognitive skills on education, special attention should be given to the use of additional socioeconomic indicators such as the skin color of participants, the urbanization rate, the level of unemployment, the level of income, parental education among others. These measures affect the causality driven by the inclusion of certain economic and demographic characteristics and minimize the endogeneity bias drawn from the inclusion of the sample variables. One additional limitation is that the survey-based data refer only to people with higher education (>13 years of study). Therefore, our empirical findings must be tested on a richer sample to capture the effect of personality traits on a broad spectrum of educational stages (e.g. early learning years, primary education, secondary education, etc.).Originality/valueOur empirical findings add enough new insights to the existing literature. First, we attempt to assess the role of noncognitive skills proxied by the Big Five Inventory (hereafter “BFI”) on the education decision made by the individuals. Second, we provide fresh evidence of nonlinear effects between personality traits and education totally ignored by the existing literature. Our third contribution is to analyze the role of personality in enhancing the importance of investment in higher education as a determinant of individual behavior. In this way, we contribute to the growing field of behavioral economics since the study of noncognitive skills offers a range of new ideas and expanding research opportunities for social scientists (economists, psychologists, sociologists, etc.).

scholarly journals Managing brand identity: effects on the employees

2017 ◽  
Vol 35 (1) ◽  
pp. 2-23 ◽  
Author(s):  
Rafael Bravo ◽  
Isabel Buil ◽  
Leslie de Chernatony ◽  
Eva Martínez
Keyword(s):  
Financial Services ◽  
Identity Management ◽  
Employee Attitudes ◽  
Partial Least Square ◽  
Least Square ◽  
Partial Least Square Regression ◽  
Brand Identity ◽  
Content Type ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to better understand the brand identity management process from the employees’ perspective. Specifically, it explores how the different dimensions of brand identity management influence employees’ attitudinal and behavioural responses. Design/methodology/approach An empirical study was carried out to test the proposed model. The sample consisted of 297 employees in the UK financial services sector. Hypothesis testing was conducted using partial least square regression. Findings Results indicate that effective brand identity management can increase employees’ identification with their organisations. Specifically, the most influential dimension is the employee-client focus. Results also show that organisational identification is a key variable to explain job satisfaction, word-of-mouth and brand citizenship behaviour. Research limitations/implications This study focusses on the UK financial sector. To explore the generalisability of results, replication studies among other sectors and countries would be useful. The cross-sectional nature of the study also limits its causal inference. Practical implications This study shows the importance of brand identity management to foster positive employee attitudes and actions that go beyond their job responsibilities. The model developed may help organisations analyse the impact of managerial actions, monitoring the potential effects of changes in brand identity management amongst employees. Originality/value Although numerous conceptual frameworks highlight the importance of brand identity management, empirical studies in this area are scarce. The current work extends previous research by empirically analysing the effects of the dimensions of brand identity management from the employees’ perspective.

Moderating effect of investor demand: privatized IPOs and flipping activity in the Pakistan IPO market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ayesha Anwar ◽  
Rasidah Mohd-Rashid
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
High Volume ◽  
Least Square ◽  
Valuable Insight ◽  
Trading Behavior ◽  
Content Type ◽  
Public Offerings ◽  
Price Performance ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of privatized initial public offerings (IPOs) on flipping activity in the Pakistan IPO market. Design/methodology/approach This study sampled 95 IPOs listed on the Pakistan stock exchange over the period of 2000 to 2019. The ordinary least square technique and quantile regression were used to examine the impact of privatized IPO on flipping activity. Findings The present study finds that privatization affects flipping activity and creates a quality signal in Pakistan’s IPO market. The findings of this study also show that privatized IPOs were subjected to high levels of flipping activity compared to non-privatized IPOs. Additionally, investors’ demand has been found to moderate the relationship between privatized IPOs and flipping activity in Pakistan’s IPO market. Research limitations/implications Based on the fact that the sample consists of a combination of privatized and non-privatized IPOs, the results provide valuable insight into factors that may lead to unusual trading behavior/flipping during the first day of listing. Originality/value Despite several studies on events (e.g. short- and long-term price performance) around IPO, there is little evidence on how privatized IPOs affect flipping activity, which is a high volume of trading immediately after listing.

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