scholarly journals Impact of Behavioral Biases on Investment Performance in Pakistan: The Moderating Role of Financial Literacy

2020 ◽  
Vol 6 (4) ◽  
pp. 1199-1205
Author(s):  
Amir Rafique ◽  
Muhammad Umer Quddoos ◽  
Usama Kalim ◽  
Muhammad Ramzan Sheikh
Keyword(s):  
Financial Literacy ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Equation Modeling ◽  
Investment Performance ◽  
Policy Makers ◽  
Behavioral Biases ◽  
Structured Equation Modeling ◽  
Moderating Role

This study aims at understanding the relationships of certain behavioral biases with the investment performance, and identifies the moderating role of financial literacy upon these hypothesized relationships. Data is collected through questionnaire from the investors trading at Pakistan Stock Exchange (PSX). Structured Equation Modeling (SEM) is used to analyze the data with the results that only anchoring and overconfidence biases have significant effects on investment performance. The results also show that presence of financial literacy does not play any role in improving the performance of investors. Majorly, findings of current study contribute by testing the moderating role of financial literacy between the behavioral biases and the outcome of investment decisions and thus expected to be useful for investors and policy makers.  

Financial access and economic development: the moderating role of financial consumer protection

2019 ◽  
Vol 15 (4) ◽  
pp. 406-424 ◽  
Author(s):  
Maryam Kriese ◽  
Joshua Yindenaba Abor ◽  
Elikplimi Agbloyor
Keyword(s):  
Economic Development ◽  
World Bank ◽  
Financial Literacy ◽  
Compliance Monitoring ◽  
Financial Access ◽  
Policy Makers ◽  
Content Type ◽  
The World Bank ◽  
Moderating Role

Purpose The purpose of this paper is to examine the moderating role of financial consumer protection (FCP) in the access–development nexus. Design/methodology/approach The study is based on cross-country data on 102 countries surveyed in the World Bank Global Survey on FCP and Financial Literacy (2013). The White heteroscedasticity adjusted regressions and Two-stage least squares regressions (2SLS) are used for the estimation. Findings Interactions between FCP regulations that foster fair treatment, disclosure, dispute resolution and recourse and financial access have positive net effects on economic development. However, there is no sufficient evidence to suggest that interactions between financial access and enforcement and compliance monitoring regulations have a significant effect on economic development. Practical implications First, policy makers should continue with efforts aimed at instituting FCP regimes as part of strategies aimed at broadening access to financial services for enhanced economic development. Second, instituting FCP regimes per se may not be enough. Policy makers need to consider possible intervening factors such as the provision of adequate resources and supervisory authority, for compliance monitoring and enforcement to achieve the expected positive effect on economic development. Originality/value This study extends evidence in the law–finance–growth literature by providing empirical evidence on the effect of legal institution specific to the protection of retail financial consumers on the access–development nexus using a nouvel data set, the World Bank Global survey on FCP and Financial Literacy (2013).

scholarly journals Environment and Potential Affecting Investment Decision for Accommodation Business: Case of Less Visited Area in Samut Songkhram and Phatthalung Province

2021 ◽  
Vol 58 (2) ◽  
pp. 1706-1717
Author(s):  
Krisada Sungkhamanee, Piyadhida Sungkhamanee
Keyword(s):  
Financial Literacy ◽  
Investment Decision ◽  
Investment Decisions ◽  
Business Case ◽  
Potential Factors ◽  
Short Term Investment ◽  
The Impact ◽  
Moderating Role

Investment decisions have great importance in different sectors of various countries and these decisions are the basis on which the outcomes of the investments are based. However, there might be certain factors that might lead to the incorrect long term and short term investment decisions. In this regard, the current study has been conducted with the core motive to explore the impact casted by the environment and potential factors i.e. salience and overconfidence on the long term investment decisions for accommodation business along with the moderation of a variable i.e. financial literacy. To fulfill this objective, the researcher has collected data from the investors of accommodation businesses in Thailand. The collected data has been subjected to different statistical techniques and tools for analysis purpose and the results have been obtained. The results obtained by the analysis of the collected data indicate that salience and overconfidence have significant impact on the long term investment decision. In addition, the moderating role of financial literacy has also been found as significant in the study. The results suggest that the investors of the accommodation business must consider the aspects of salience and overconfidence before taking any long term investment decision to avoid failure of the investment decision.    

scholarly journals EFFECT OF EMOTIONAL INTELLIGENCE AND FINANCIAL LITERACY ON INVESTMENT DECISION MAKING WITH A MEDIATING ROLE OF RISK PERCEPTION

2014 ◽  
Vol 02 (02) ◽  
pp. 12-20
Author(s):  
Sahar Parvez ◽  
Keyword(s):  
Emotional Intelligence ◽  
Risk Perception ◽  
Financial Literacy ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Mediating Role ◽  
Investment Decision Making ◽  
The Impact

This research paper examines the impact of emotional intelligence and financial literacy on investment decision with a mediating role of risk perception. The data is collected by using questionnaire, from a sample of 152 investors, from stock exchange and banks. The results support that to make adequate investment decisions, investors should be financially literate and have control on their emotions. However, risk perception of investors does not mediate this relationship.

scholarly journals Composition of Commissioners and Directors, Profitability, Capital Structure and Investor Investment Decisions: Role of Sustainable Investment

2020 ◽  
Author(s):  
Krystella . ◽  
Tigor Sitorus ◽  
Edi Purwanto
Keyword(s):  
Capital Structure ◽  
Structural Equation ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Financial Sector ◽  
Mediation Effect ◽  
Equation Modeling ◽  
Observation Data ◽  
Sustainable Investment

This study aims to determine the role of the sustainable investment on the composition of commissioners and directors, profitability, capital structure and investor investment decisions in financial sector companies listed on the Indonesia Stock Exchange. The research data were obtained from 2015-2018 by annual reports, financial reports, sustainability reports, summaries of tradable shares volume, and summaries of listed shares of financial sector companies listed on the Indonesia Stock Exchange (IDX). 48 units of observation data were collected. This study used quantitative analysis techniques with Structural Equation Modeling (SEM) and was processed by SmartPLS 3. The test results showed: 1) investor investment decisions are negatively and significantly affected by composition of commissioners and directors; 2) investor investment decisions are not affected by profitability; 3) investor investment decisions are positively and significantly affected by capital structure; 4) sustainable investment is positively and significantly affected by the composition of commissioners and directors; 5) sustainable investment is positively and significantly affected by profitability; 6) sustainable investment is not affected by capital structure; 7) investor investment decisions are positively and significantly affected by sustainable investment. Therefore, the sustainable investment mediation effect of the composition of commissioners and directors on investor investment decisions is quasi-mediating. It is also proven that there is fully meditating on the effect of profitability on investor investment decisions. While the effect of capital structure on investor investment decisions is not proven to mediate. Keywords: composition of commissioners and directors, profitability, capital structure, sustainable investment, investor investment decision

scholarly journals Heuristic and Biases Related to Financial Investment and the Role of Behavioral Finance in Investment Decisions: A Case Study of Pakistan Stock Exchange

2021 ◽  
Vol 4 (2) ◽  
pp. 227-236
Author(s):  
YASIR KHAN ◽  
ABDUL WAHEED KHAN ◽  
MUKHARIF SHAH ◽  
DR. SHAFIQ UR REHMAN
Keyword(s):  
Behavioral Finance ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Developed Countries ◽  
Main Stream ◽  
Cross Sectional ◽  
Investment Performance ◽  
Financial Investment ◽  
The World

The Behavioral Determinants (BD) of Perceived Investment Performance (PIP) are considered to be one of the most sizzling research concerns in the world of investment behavioral finance. Therefore, the main purpose of this study was to investigate the Heuristic and Biases Related to Financial Investment and the Role of Behavioral Finance in Investment Decisions in case of Pakistan stock exchange (PSX). Specifically, this study amid at to identify which biases impact more on PIP and to identify useful insights from the results of the study that may benefit in this discipline. Five likert scale questionnaire adapted from prior studies as it is satisfying the current scenario for industry settings of PSX. A quantitative cross sectional research design has been used in this study. The regression results found that the herding effects, over confidence, availability bias and representativeness have positive and significant impact on perceived investment performance. This study has significance for the individual investors, financial advisors, companies listed in PSX and Government. For the investors, the factors that influence their investment performance are crucial as these will influence their financial plans of future. Practical implications includes investors who desires to invest should incorporate the said BD for the accurate valuation of the assets and in taking future investment decisions. In PSX, it is first endeavor to uncover the HE, OC, AB and R as BD of PIP. This paper contribute to the existing body of literature since main stream of the previous studies concentrate more on the developed countries markets of the world. Moreover, this study put forth a well-integrated model to probe the effect of variables under consideration on PSX. Reflection of the said effect of behavioral impact in the decision making process of individuals will make the decisions more optimal and rational as well.

scholarly journals Demographic Factors and Herding Behaviour of Investors: Moderating Role of Islamic Religiosity

2020 ◽  
Vol 3 (2) ◽  
pp. 193-203
Author(s):  
Saeed Ahmad Sabir ◽  
Tasawar Javed ◽  
Waseem Ul Hameed ◽  
Hummaira Qudsia Yousaf
Keyword(s):  
Quantitative Research ◽  
Stock Exchange ◽  
Investment Decision ◽  
Demographic Factors ◽  
Individual Investors ◽  
Policy Makers ◽  
Investment Decision Making ◽  
Relationship Of ◽  
Moderating Role

Investors indulge in biases while making investment decision because investment decision making in stock market is a difficult process. One of the factors that affect risk taking behaviour of individual investors is Demographic factor. However, little work has been done to investigate the effect of demographic factors on herding behaviour of individual investors of Pakistan stock exchange. Therefore, the ultimate aim of this study is to highlight the role of the effect of demographic factors on herding behavior of investors with moderating role of Islamic religiosity. Quantitative research method was employed and data collected was collected from 166 individual investors by using survey questionnaires. Convenience sampling method was used to collect the data. Partial Least Squares analysis was conducted to test the hypotheses. The findings of this study directed that Islamic religiosity moderate the relationship of demographic factors with herding behaviour. This study is contributed a new empirical insights on behaviour of Pakistan stock market’s investors, therefore the results of this study have implications for policy makers of Pakistan stock exchange (PSX) while they making the strategies related to investment.

scholarly journals The Effect of Stakeholder’s Pressure on Firm Performance and the Moderating Role of Perceived Economic Crisis

2020 ◽  
Vol 3 (4) ◽  
pp. 20-26
Author(s):  
Mir Damoun Mousavi ◽  
Mir Danial Mousavi
Keyword(s):  
Firm Performance ◽  
Economic Crisis ◽  
Structural Equation ◽  
Stock Exchange ◽  
Equation Modeling ◽  
Institutional Pressures ◽  
Stakeholder Pressure ◽  
Positive Effect ◽  
Moderating Role

The stakeholder pressure is one of the institutional pressures, in this regard, organizations have their internal characteristics to match the expectations of key stakeholders in the environment. In the present study, the effect of stakeholder’s pressure on firm performance was examined considering the moderating role of the perceived economic crisis. To investigate relationships, 208 questionnaires were collected from firms listed in the Tehran stock exchange. Structural equation modeling and PLS software were used to investigate the relationships. The results of this study showed that stakeholder’s pressure has a positive effect on firm performance, and perceived economic crisis reduces firm performance, and when firms believe to more likely to be in crisis, the positive effect of stakeholder’s pressure on firm performance was decreased.

Role of Financial and Non-Financial Information in Shaping Trading Behavior: A Retail Investor’s Perspective

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Muhammad Naveed ◽  
Muzammal Ilyas Sindhu ◽  
Shoaib Ali
Keyword(s):  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Financial Information ◽  
Equation Modeling ◽  
Trading Behavior ◽  
Stock Trading ◽  
Retail Investors ◽  
Retail Investor

This study aims to examine the role of information disclosure in determining retail investor trading behavior. The approach of the study is deductive, while the quantitative strategy is adopted by using a survey questionnaire for data collection. Primary data was collected from 386 retail investors actively involved in stock trading at Pakistan Stock Exchange (PSX). Theoretical underpinning is based on the signaling theory. Covariance based structural equation modeling (SEM) has carried out to statistically examine the strength of the proposed model.The key findings of this study exhibit that on average, retail investors invest in firms with detailed financial and non-financial disclosures. The result also shows the intervening influence of perceived corporate image on retail investor decisions. Categorically, the finding of this study indicates that improved financial and non-financial disclosure practices support retail Investors to make sound stock investment decisions. The proposed model is novel to insight into the retail investor investment decision in the context of Pakistan.The results should be of interest to firms reporting detail and cohesive non-financial information with the presumption that it is requisite to influence the investor's investment decision making. The result reflects the mismatch between retail Investors' preferences and firm's information reporting practices, which in turn affect their appeal toward investment decisions. This study contributes to the comprehension of the information needs of retail investors and how it hailed their trading behavior.  The findings of the study remain robust to firms listed on a stock exchange and retail Investor involved in stock trading.

Peran kepemilikan institusional, perencanaan pajak dan dewan komisaris asing terhadap nilai perusahaan

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Anita Ade Rahma ◽  
Lisa Nabawi ◽  
Ronni Andri Wijaya
Keyword(s):  
Significant Influence ◽  
Firm Value ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Total Sample ◽  
Tax Planning ◽  
Purposive Sampling ◽  
Institutional Leadership ◽  
Company Value

The purpose of this study is to analyze the role of institutional leadership, tax planning and foreign board of commissioners on firm value. The population in this study were 615 companies listed on the Indonesia Stock Exchange in 2015-2017. The sample was chosen using purposive sampling to get a total sample of 325 companies with a total of 975 observations of company data. The results of this study indicate that institutional leadership and tax planning have no role in increasing company value. While the foreign board of commissioners showed a significant influence on the value of the company. This proves that there is a need for diversity in the structure of the board that can trigger an increase in the value of the company. In addition, the presence of a foreign board is needed for the progress of the companyKeywords: Investment decisions; funding decisions; dividend policy; company value

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