Investment Diversification and Optimal Cultural Background

Investment diversification is a prerequisite for dynamic growth performance. It is intuitively accepted that cultural background affects investment behavior and investment decision making, but does cultural change affect investment diversification? This paper assesses whether cultural background shapes growth performance through investment diversification. Empirical analysis was conducted using decade-level data for a sample of 33 OECD countries over the 30-year period from 1981 to 2010. Using fixed effects estimation, different intercepts across countries, and decade time dummies, the analysis shows that societies that are closer to the optimal cultural background achieve better investment diversification behavior. The article thus contributes to the long-standing debate on the cultural roots of growth.

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A Study on The Behavioural Aspects of Retail Investors for Investment Decision Making in Telangana State

GATR Journal of Business and Economics Review ◽

10.35609/jber.2016.1.1(7) ◽

2016 ◽

Vol 1 (1) ◽

pp. 51-59

Author(s):

Jhansi Rani Boda ◽

G. Sunitha ◽

Parag Ray

Keyword(s):

Decision Making ◽

Behavioral Finance ◽

Investment Decision ◽

Investment Behavior ◽

Behavioral Patterns ◽

Behavioral Factors ◽

Investment Decision Making ◽

Retail Investors ◽

Telangana State ◽

Behavioural Aspects

Objective - Investment is the commitment of funds which have been saved from the current consumption with an expectation of favorable future returns. Investment behavior is concerned with choices made about the purchase of a significant number of securities for an individual or institutional account. Individual investment behavior is relatively a new area of research in behavioral finance. This study aims to identify the various behavioral patterns of retail investors and their investment decision making in the newly formed Telangana state of India. Methodology/Technique - Data were collected from a sample of 200 retail investors via a structured questionnaire. Factor analysis was then conducted to critically identify the behavioral patterns of the retail investors. Findings - The findings of this study indicate that the two behavioral factors of Heuristics and Prospect have significant impact on the investment decision making attitudes of the retail investors. Novelty - As a newly formed state in India, the Telangana state provides potential investment opportunities for retail as well as institutional investors. It is thus, highly imperative to explore how retail investors make investment decisions especially in the newly formed Telangana State in India Type of Paper: Empirical Keywords: Behavioral Factors; Behavioral Finance; Investment Behavior; Investment Decision Making; Retail Investor.

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The effect of visualization and complexity tasks in investment decision making

HOLISTICA – Journal of Business and Public Administration ◽

10.2478/hjbpa-2019-0006 ◽

2019 ◽

Vol 10 (1) ◽

pp. 68-77

Author(s):

Luciana S. Almilia ◽

Nurul H. U. Dewi ◽

Putri Wulanditya

Keyword(s):

Decision Making ◽

Experimental Method ◽

Investment Decision ◽

Private University ◽

Low Complexity ◽

Level Of Confidence ◽

Investment Decision Making ◽

Analysis Technique ◽

Level Data ◽

Accuracy Level

Abstract This study examines the effect of visualization level and level of assignment complexity on investment decision making as measured by level of accuracy, level of confidence and calibration level. This research uses experimental method. The experimental method in this research is 2x2 (mixed design) include: (1) Level of visualization (high and low) and (2) Complexity of task (high and low). The dependent variable in this research is the level of accuracy, level of confidence and calibration level. Data analysis technique used in this research is independent sample t-test. Participants in this study are students of Accounting Undergraduate Program in one Private University in East Java. The total participants in this study were 103 people, but only 77 participants who passed the check manipulation and can be analyzed further. The results of this study indicate that the visualization effect in decision-making has an effect only when decision makers receive assignment with low complexity of assignment. The results of this study indicate that the effect of the complexity of the assignment influences both decision-making as measured by the level of accuracy, level of confidence and calibration level.

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The Effects on Investment Behavior of Zero Interest Rate Policy—Evidence From a Roulette Experiment

Applied Economics and Finance ◽

10.11114/aef.v6i4.4272 ◽

2019 ◽

Vol 6 (4) ◽

pp. 18 ◽

Cited By ~ 2

Author(s):

Christian A. Conrad

Keyword(s):

Interest Rate ◽

Interest Rates ◽

Risk Taking ◽

Investment Decision ◽

Investment Behavior ◽

Real Economy ◽

Interest Rate Policy ◽

Capital Costs ◽

Investment Decision Making ◽

Negative Interest Rates

This paper examines the effects of interest rate cuts on investment behavior. The methodology is to simulate investment decision making under different capital costs. The experiment showed that decreasing interest rates encourage risk-taking. With the decreased interest rate as borrowing costs the risk taking increased weakly but continuously. The risk taking increased strongly when the interest rate reached zero. Thus the experiment showed excessive risk-taking when there were no capital costs. This finding supports the hypothesis that extreme expansive monetary policy with low, zero or negative interest rates encourage financial bubbles and overinvestments or wrong investments in the real economy.

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Research on the Relationship Between Venture Capitalists’ Trust in Entrepreneur and Their Investment Behaviors

Entrepreneurship Research Journal ◽

10.1515/erj-2020-0151 ◽

2020 ◽

Vol 0 (0) ◽

Author(s):

Sulei Li ◽

Hongtao Yang

Keyword(s):

Decision Making ◽

Positive Impact ◽

Investment Decision ◽

Psychological State ◽

Investment Behavior ◽

Venture Capitalists ◽

Investment Decision Making ◽

Risk Appetite ◽

Key Factor ◽

The Relationship

AbstractVenture capitalists’ trust in entrepreneurs and their investment behaviors does not interact directly; Trust is a psychological state rather than static and stable phenomena. The relationship is affected by multiple factors. This study aims to develop a better understanding of the complex relationship and to show the degree of influence among factors, and to reveal “The Bewilderment of Decision-making” of VC. Based on SEM, this paper analyzes the relationship between the factors: the influencing factors at the initial stage of trust, trust, investor risk appetite, entrepreneurs’ behaviors, capitalists’ decision-making Behaviors, capitalists’ post-investment Behaviors. Our qualitative analysis is based on data by issuing 323 questionnaire surveys of 104 Chinese venture capital firms which are divided into different regions by Global Entrepreneurship Monitor (GEM). By analyzing various behaviors, we find that entrepreneurs’ behavior is a key factor in this relationship. Several factors studied earlier have a positive impact on the capitalist’s pre-investment decision-making behavior, but no significant impact on post-investment behavior. These results include trust and investor risk appetite. Through interviews, it was found that the capitalist’s post-investment behavior was related to the capitalist’s ability, resources, management mechanism and other factors.

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The Effects of Irreversibility and Uncertainty on Business Investments: A New View of Investment

Financial Assets and Investing ◽

10.5817/fai2014-3-1 ◽

2014 ◽

Vol 5 (3) ◽

pp. 7-20

Author(s):

Katarína Belanová

Keyword(s):

Empirical Analysis ◽

Investment Decision ◽

Firm Level ◽

Factors Affecting ◽

Real Options Approach ◽

Investment Decision Making ◽

Level Data ◽

The Impact ◽

The Relationship ◽

The Empirical Analysis

This article presents a survey of recent theoretical, as well as empirical, contributions concerning business investments, which help to explain the investment decision making of companies. These contributions emphasize the relevance of idiosyncratic factors affecting investment decisions such as the degree of irreversibility and uncertainty, interactions between these factors may generate an opportunity cost equivalent to the exercise of an option and so they add an important dimension to the neoclassical theory of investment (also called standard or orthodox theory of investment). This theory has not recognized the important qualitative and quantitative implications of this interaction, what can explain some of its failures. We investigate the irreversibility of investments and the impact this has on the nature of the relationship between investment and uncertainty in the way of empirical analysis. The empirical analysis uses firm – level data and is based on a survey of 53 automotive suppliers, which was carried out during the year 2011. We find supportive evidence for the fact that uncertainty is negatively associated with planned investments of the companies surveyed, which remains true also in the presence of irreversibility. At the end we demonstrate the core of the real options approach in a form of a practical example.

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SOME APPROACHES TO EVALUATION MACROECONOMIC EFFICIENCY OF DIGITALISATION

Business Management and Education ◽

10.3846/bme.2019.11326 ◽

2019 ◽

Vol 17 (2) ◽

pp. 232-247

Author(s):

Elena Stremousova ◽

Olga Buchinskaia

Keyword(s):

Fixed Effects ◽

Investment Decision ◽

Basic Research ◽

Gdp Growth ◽

Per Capita Gdp ◽

Development Indicators ◽

Fixed Effects Panel Regression ◽

Investment Decision Making ◽

Per Capita ◽

Macroeconomic Efficiency

Purpose – the purpose of the article is to study the effect of digitalisation development indicators on per-capita GDP growth. Research methodology – the basic research method is the fixed-effects panel regression that describes the effect of the digitalisation development indicators on per-capita GDP between 1999 and 2017. Findings – research showed the most critical factors for per-capita GDP growth are the ones that linked with fixed and mobile subscriptions. Research limitations – The limitations of the research stem from the limitations of analysis as the method that has been employed makes it possible to measure the effect of the selected variables on per-capita GDP, but further research requires a detailed analysis of the factors being studied in application to each country. Practical implications – The findings can be used as a basis for choosing areas of more detailed factor analysis of the digitalisation process effectiveness and can support investment decision-making. Originality/Value – The study enables one to identify the most and the least important factors that are reflected by digitalisation indicators that have an impact on the per-capita GDP.

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