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.

scholarly journals Gender Differences in Financial Decisions

2018 ◽  
Vol 11 (1) ◽  
pp. 21-27
Author(s):  
Jeetendra Dangol
Keyword(s):  
Gender Differences ◽  
Decision Making ◽  
Financial Literacy ◽  
Sampling Technique ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Convenience Sampling ◽  
Risk Taker ◽  
Survey Questionnaires

This paper examines the gender differences in financial decision-making of university students who are young, single, childless individuals that have at least average financial literacy and very small or no income. This paper is based on the survey questionnaires developed by Grable and Lytton (2003), distributed and collected from 100 students (50 men and 50 women) by using convenience sampling technique. The study finds that men and women differ in their financial decision. Women are less risk taker than men in financial decision-making; it indicates that women prefer to safer investment.

PENGARUH FINANCIAL ATTITUDE DAN FINANCIAL KNOWLEDGE TERHADAP KEPUTUSAN KEUANGAN PADA PEMILIK USAHA KECIL DAN MENENGAH (UKM) DI PULAU LOMBOK: SUATU PERSPEKTIF BEHAVIORAL FINANCE

2020 ◽  
Vol 6 (2) ◽  
pp. 166-178
Author(s):  
Siti Aisyah Hidayati ◽  
Sri Wahyulina ◽  
Embun Suryani
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Financial Management ◽  
Sampling Technique ◽  
Provincial Government ◽  
Financial Knowledge ◽  
Financial Attitudes ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision

This study aims to analyze the effect of Financial Attitude and Financial Knowledge on financial decisions on Small and Medium Business Owners (UKM) on Lombok Island. The theoretical contribution of this research is expected to contribute to science and the development of behavioral finance theories related to financial decision making in Small and Medium Enterprises (SMEs). It is also expected that behavioral finance will be the subject of financial management courses. Furthermore, the practical contribution of this research is expected to provide input, suggestions and recommendations to the policy maker of the NTB Provincial Government in making policies related to the development of SMEs. This research is a quantitative approach based research, with the type of explanatory research. The study population is all SMEs in the island of Lombok. The sampling technique is done by using Non probability sampling, which uses judgment sampling, which is choosing SMEs that are engaged in the pottery industry and have already exported. From the existing population, there are 35 (thirty-five) SMEs that can be taken as samples. Respondents in this study are the owners of each of these UKM. Data collection techniques used in this study were using a questionnaire. To achieve research objectives and hypothesis testing, the data obtained will be processed according to needs using GSCA (Generalized Structured Component Analysis) statistical tools.The results showed that Financial Attitudes had a positive and significant effect on financial decision making by SME owners and owners. This means that the better the Financial Attitudes owned by SME owners, the bolder they are in making financial decisions. Financial Knowledge has a positive and significant impact on financial decision making by SME owners and owners. This means that the better the Financial Knowledge possessed by SME owners, the bolder the financial decisions will be

scholarly journals MILLENNIALS: THEIR FINANCIAL LITERACY AND DECISION MAKING

2020 ◽  
Vol 1 (3) ◽  
pp. 326-340
Author(s):  
Arie Widyastuti ◽  
Ratna Komara ◽  
Layyinaturrobaniyah Layyinaturrobaniyah
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Credit Card ◽  
Significance Level ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Demographic Profiles ◽  
Gender Education ◽  
Financial Decision ◽  
Mother Education

Millennials are now the largest population groupings in Indonesia, therefore their decisions in financial matters have significant implications for themselves as well as the country’s economy. This paper is aimed to evaluate the level of financial literacy possessed by the Millennials and their attitudes towards making key financial decisions. Data were collected through questionnaire of 30 questions with 15 questions regarding financial literacy and 15 questions related to financial decision making, with the participants in the study consists of 446 individuals who were born from 1980s to 2000s. The result reveals that better financial literacy leads to better financial decision at 1% significance level. This study also indicates that, although demographic profiles such as gender, education, length of working experience, income, number of credit card ownership and mother education have positive correlation with the level of financial literacy, they do not have moderating effect to the financial literacy and financial decision making of the millennials

The Role of Financial Inclusion

2020 ◽  
pp. 248-279
Author(s):  
Ulkem Basdas
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Education ◽  
Financial Inclusion ◽  
Decision Making Process ◽  
Standard Definition ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Different Levels

This chapter highlights the importance of financial education, its link with financial decision-making process, comparative status of different countries, and efforts to improve current situation. Unfortunately, there is no standard definition for neither financial education nor measures to quantify it. Therefore, this chapter first aims to provide a comprehensive definition in order to explain how financial knowledge affects the decision-making process. Then, financial literacy measures from previous studies over different countries would be discussed to show financial illiteracy problem is global. Lastly, solutions and recommendations would be discussed at three different levels: younger people, individuals, and national strategies.

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.

Australian women with good financial knowledge fare better in divorce

2021 ◽  
pp. 031289622110220
Author(s):  
Tracey West ◽  
Elizabeth Mitchell
Keyword(s):  
Financial Literacy ◽  
Positive Impact ◽  
Financial Education ◽  
Jel Classification ◽  
Financial Knowledge ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision

Divorce dissolves couple households, who likely specialised in household financial decision-making tasks, into singles who need to learn new skills. Financial decisions will be particularly challenging for those newly separated people that are lacking knowledge and confidence. Given the substantive literature supporting the lack of financial knowledge of women in comparison to men, women are likely to be more disadvantaged by this aspect of divorce. We employ the HILDA Survey and find support for the role of financial literacy in improving wealth outcomes in divorce, particularly for women. We find that the positive impact is significant over the long term. This research contributes to knowledge of the role of financial education in building resilience to endure financial shocks. JEL classification: D14; G53; G50; J12; J16

scholarly journals Challenges for Financial Decision Making at Older Ages

2017 ◽  
Author(s):  
Keith Jacks Gamble
Keyword(s):  
Older Adults ◽  
Decision Making ◽  
Financial Literacy ◽  
Significant Risk ◽  
Significant Risk Factor ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Self Confidence ◽  
Large Cohort Study ◽  
Financial Decision

Increased longevity has brought about financial challenges for which many seniors and their families are unprepared. This chapter describes recent research findings on financial decision making at older ages enabled by the Rush Memory and Aging Project, a large cohort study of aging. Although financial experience increases with age, financial decision making capabilities tend to diminish due to declines in cognitive ability. Declines in cognition coincide with diminished financial literacy and declining self-confidence. Older adults who experience cognitive decline often have difficulties managing their money and are more likely to get help with their financial decisions. Older adults are frequently targeted by scammers. Declining cognition is a significant risk factor for becoming a victim of financial fraud. Seniors who are over-confident in their financial knowledge are more likely to be victimized.

scholarly journals The role of financial literacy and advice in financial decision making

2019 ◽  
Vol 20 (1) ◽  
pp. 388-413
Author(s):  
M Reyers
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Advice ◽  
South Africans ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Low Levels ◽  
Key Questions

Financial decision making is complex and individuals either need to have the financial knowledge to make the correct decisions, or they need to ask for advice from experts. However, there are two key questions pertaining to financial advice. Firstly, do financially unsophisticated individuals know that they need advice, and do they therefore ask for assistance? Secondly, if they do ask for advice, are financially unsophisticated individuals able to assess the quality of the advice received? A growing body of research is focused on determining to what extent financial advice can act as a substitute for low levels of financial literacy. To date, studies have found conflicting results. This study used data from a national survey of South Africans to determine whether advice could substitute for low levels of financial sophistication. Additionally, the quality of advice in preretirement cash-out decisions was assessed using survey data collected at a university. The results indicate that professional financial advice complements financial literacy, while advice from other sources could substitute for low levels of financial sophistication. Furthermore, the study found that with respect to pre-retirement cash-out decisions, financially unsophisticated individuals followed advice from human resources departments or fund administrators and received quality advice.

The Role of Financial Inclusion

2021 ◽  
pp. 374-398
Author(s):  
Ulkem Basdas
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Education ◽  
Financial Inclusion ◽  
Decision Making Process ◽  
Standard Definition ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Different Levels

This chapter highlights the importance of financial education, its link with financial decision-making process, comparative status of different countries, and efforts to improve current situation. Unfortunately, there is no standard definition for neither financial education nor measures to quantify it. Therefore, this chapter first aims to provide a comprehensive definition in order to explain how financial knowledge affects the decision-making process. Then, financial literacy measures from previous studies over different countries would be discussed to show financial illiteracy problem is global. Lastly, solutions and recommendations would be discussed at three different levels: younger people, individuals, and national strategies.

scholarly journals THE EFFECT OF FINANCIAL ATTITUDE AND FINANCIAL KNOWLEDGE ON COMPANY PERFORMANCE WITH FINANCIAL DECISIONS AS INTERVENING VARIABLES: A BEHAVIORAL FINANCE PERSPECTIVE

2021 ◽  
Vol 10 (1) ◽  
pp. 1
Author(s):  
Siti Aisyah Hidayati ◽  
Sri Wahyulina ◽  
Embun Suryani
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Financial Management ◽  
Financial Knowledge ◽  
Company Performance ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
The Impact ◽  
Lombok Island

This study aims to analyze the effect of Financial Attitude and Financial Knowledge on Company Performance with Financial Decision as an Intervening Variable on Small and Middle Enterprises Owners in Lombok Island. This research's theoretical contribution is expected to contribute to the knowledge and development of behavioral finance theory related to Financial Decision-making and Company Performance in Small and Middle Enterprises. Besides, it is also hoped that behavioral finance will become a subject in the financial management course. Furthermore, this research's practical contribution is expected to provide input, suggestions, and recommendations to the NTB Provincial Government's policymakers in making policies related to SMEs' development.               This research is research based on a quantitative approach, with this type of explanatory research. The study population was all SMEs in Lombok Island. The sampling was carried out by non-probability selection, namely using judgment sampling, selecting SMEs engaged in the pottery industry and had already exported. Of the existing population, there are 35 (Thirty-Five) SMEs that can be taken as samples. Respondents in this study are the owners of each of these SMEs. The data collection technique used in this study was to use a questionnaire. The data obtained will be processed as needed by using GSCA (Generalized Structured Component Analysis) statistical tools to achieve the research objectives and hypothesis testing.               The results showed that Financial Attitude and Financial Knowledge had a positive and significant effect on Financial Decision-making. Financial Decisions did not mediate the impact of Financial Attitude and Financial Knowledge on Company Performance, and Financial Decisions had a negative and significant effect on Company Performance. This circumstance is also motivated by the age of most of the respondents of productive age, mostly male, most of the education level is high school, and the length of business is more than 10 (ten) years. Keywords: Financial Attitude, Financial Knowledge, Financial Decision, Company Performance

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