scholarly journals The Impact of Corporate Performance on Mental Accounting and Loss Aversion in Financial Decisions

2021 ◽  
Vol 12 (4) ◽  
pp. 259
Author(s):  
Mona Hassabelrasoul Mohammad ◽  
Dalal Mohamed Ebrahim Mohamed ◽  
Elsaid Abd Elazim Tolba Elsharkawi
Keyword(s):  
Graduate Students ◽  
Real Estate ◽  
Loss Aversion ◽  
Corporate Performance ◽  
Mental Accounting ◽  
Organization Performance ◽  
Financial Decisions ◽  
Real Estate Company ◽  
The Impact

This study investigates the effect of the organization performance on two psychological biases, mental accounting and aversion to loss, on financial decisions to both investors and managers. To achieve this, two experiments are conducted. The first experiment consists of 40 graduate students as investors, while the second one consists of 40 accountants in a real estate company as managers. The results of the study indicate that the performance of companies impacts both mental accounting and aversion to loss of investors, whereas the performance of companies affects the mental accounting of managers in making their financial decisions but does not affect the aversion to loss.

scholarly journals Impact of Behavioral Biases on Long Term Financial Decisions and Corporate Performance: An Evidence from Non-Financial Sector of Pakistan

2017 ◽  
pp. 1-28
Author(s):  
Muhammad Zia-ur-Rehman Et al.,
Keyword(s):  
Capital Structure ◽  
Loss Aversion ◽  
Dividend Policy ◽  
Corporate Performance ◽  
Mental Accounting ◽  
Financial Decisions ◽  
Behavioral Biases ◽  
Relationship Of ◽  
The Relationship

Purpose: In this study, the relationship of managerial biases i.e. mental accounting, optimism and loss aversion with corporate performance is investigated. For path analysis, we explored this relationship through two subdomains of long term financial decisions (capital structure and dividend policy). Moreover, in this study, the mediating role of capital structure and dividend policy was also theorized and tested on the above-stated relationship. Sample/ Methodology/Approach: The sample of the study consisted of eighty-five (n=85) CEOs, CFOs, General Managers and Financial Treasurers of the nonfinancial sector (listed in Pakistan Stock Exchange). Primary data was collected through closed ended questionnaire by using convenience sampling technique. Statistical technique PLS-SEM was applied for data analysis by using SMART PLS 3.2 statistical package. Findings: The findings of the study depicted that behavioral biases influence corporate performance as managers take a decision under the influence of personal feelings, perceptions, and intuitions. We also inferred from the results that the effect of biases (mental accounting, optimism, and loss aversion) is significant on long term financial decisions. We also found that dividend policy and capital structure mediates the relationship between optimism and mental accounting with corporate performance. Originality/Value: This research study fills the gap in existing literature by investigating the relationship of managerial biases with corporate performance through the path of long term financial decisions of corporate financial managers. Previously, extensive research work is available on basic topic that how dividend policy and capital structure affect corporate performance, however, we found comparatively quite less discussion on stimulating forces (behavioral biases) for financial decision making and this gap is covered by this study through explaining the impact of behavioral biases on long term financial decisions which further devastate corporate performance. This study as an empirical evidence is helpful for researchers, academicians, and practitioners to understand and implement the notions coined by behavioral finance, regarding the effects of behavioral biases on long term financial decisions. Keywords: Optimism, Loss Aversion, and Mental Accounting, Long term financial decision, Corporate Performance, Pakistan.

Aspects of sensitivity analysis on NAV valuation in Real Estate sector – A case on Prajay Engineers Syndicate

2015 ◽  
Vol 1 (3) ◽  
pp. 44-52 ◽  
Author(s):  
Prabhat Mittal
Keyword(s):  
Sensitivity Analysis ◽  
Real Estate ◽  
Construction Cost ◽  
Valuation Model ◽  
Property Prices ◽  
Real Estate Sector ◽  
Asset Values ◽  
Near Term ◽  
Real Estate Company ◽  
The Impact

Valuation of property prices has become challenging for many real estate companies in India. Many companies have just entered to market and hence lack proven track records, their land banks and Net Asset values NAVs are not mature and carry regulatory and disclosure risks. NAVs are used as standard valuation benchmark for at least the near term. The present study in the paper is an attempt to create a valuation model for a real estate company. Sensitivity analysis of increase in cost of property prices and construction cost on the valuation has also been achieved to see the impact on the NAVs

scholarly journals The Influence of E-Marketing on Performance of Real Estate Enterprises: Based on Super-Efficiency DEA and Grey Entropy Methods

2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
Zhong-Huan Wu ◽  
Hong-jie Chen
Keyword(s):  
Real Estate ◽  
Business Performance ◽  
Corporate Performance ◽  
Marketing Channels ◽  
Online Marketing ◽  
Super Efficiency ◽  
Entropy Methods ◽  
Real Estate Enterprises ◽  
Real Estate Company

E-marketing is an important tool for real estate enterprises. We evaluate 3 online marketing channels of 44 Chinese real estate companies. Super-efficiency DEA and grey entropy methods are applied to analyse the influence of E-marketing on the performance of real estate enterprises. We find that E-marketing will affect the business performance of real estate companies. Real estate company managers should adopt more strategies to improve corporate performance.

Loss Aversion and Market Liquidity in the Real Estate Market

2014 ◽  
Vol 22 (2) ◽  
pp. 223-249
Author(s):  
Sun Young Park
Keyword(s):  
Real Estate ◽  
Loss Aversion ◽  
Real Estate Market ◽  
Commercial Real Estate ◽  
Market Liquidity ◽  
The Real Estate ◽  
The Real Estate Market ◽  
Expectation Hypothesis ◽  
Property Sales ◽  
The Impact

The most commonly observed risk averse behavior in the commercial real estate market is loss aversion on the part of investors; i.e., investors are more sensitive to prospective losses than to prospective gains. This observation leads to the natural question : Does the market rationally anticipate investors' loss aversion? If not, then does loss aversion become stronger in a relatively illiquid market? The answer to these questions provides strategically important implications to institutional investors. We propose to explore the impact of loss aversion on the commercial real estate market by testing two competing hypotheses : (1) the rational market expectation hypothesis and (2) the liquidity spiral hypothesis. The rational market expectation hypothesis holds that the market rationally anticipates investors' behavioral loss aversion. As a result, the interaction between lagged market liquidity and loss aversion does not have an impact on the probability of property sales. On the other hand, the liquidity spiral hypothesis holds that the interaction between market liquidity and loss aversion has an impact on the probability of property sales due to the self-fulfilling feedback effect between loss aversion and market liquidity. In the context of REITs' property transactions, we find partial evidence for the liquidity spiral hypothesis : private market liquidity and stock market liquidity each has an additional impact on the sale probability of property.

scholarly journals The Impact Of Psak 72 Implementation On Financial Performance In The Pandemic Time Covid-19 (Empirical Study On Real Estate Companies Registered In Indonesia Stock Exchange)

SENTRALISASI ◽  
2021 ◽  
Vol 10 (1) ◽  
pp. 12
Author(s):  
Duwi Rahayu Rahayu ◽  
Imelda Dian Rahmawati ◽  
Dina Dwi Oktavia Rini
Keyword(s):  
Real Estate ◽  
Empirical Study ◽  
Financial Performance ◽  
Negative Impact ◽  
Stock Exchange ◽  
Secondary Data ◽  
Significant Negative Effect ◽  
Negative Effect ◽  
Real Estate Company ◽  
The Impact

The purpose of this study is to examine the impact of the implementation of PSAK 72 on financial performance during the Covid-19 pandemic (empirical study of real estate companies listed on the Indonesian stock exchange). This research is a quantitative research, where the data used are secondary data in the form of financial statements of real estate companies. The sample of this study is a real estate company that provides periodic financial reports on the Indonesia Stock Exchange in 2019 and the second quarter of 2020 with a total of 46 sample companies. The results of the study indicate that PSAK 72 has a significant negative effect on the liquidity ratio, profitability ratio, activity ratio, and market ratio, while the implementation of PSAK 72 has no significant effect on the solvency ratio. This show, although the implementation of PSAK 72 has had a significant negative effect, companies have started to prepare for the implementation of PSAK 72 by conducting evaluations, adaptations and training for employees before actually implementing PSAK 72. The meaning of not fully implementing PSAK 72 has a negative impact on real estate company earnings, because the implementation of these standards was also followed by the Covid-19 pandemic which also resulted in a decrease in income for companies.

scholarly journals Modelling the Impact of Different COVID-19 Pandemic Waves on Real Estate Stock Returns and Their Volatility Using a GJR-GARCHX Approach: An International Perspective

2021 ◽  
Vol 14 (8) ◽  
pp. 374
Author(s):  
Mateusz Tomal
Keyword(s):  
Real Estate ◽  
Stock Returns ◽  
Financial Market ◽  
International Perspective ◽  
Limited Impact ◽  
The Us ◽  
Real Estate Company ◽  
The Impact ◽  
Pandemic Wave

This paper aims to investigate the impact of various COVID-19 pandemic waves on real estate stock returns and their volatility in developed (US, Australia), emerging (Turkey, Poland), and frontier (Morocco, Jordan) markets. A study using a GJR-GARCHX model revealed that the pandemic outbreak had a limited impact on real estate company stocks. The first pandemic wave only in the US caused a decline in stock returns. In turn, this was the case in Poland and Jordan during the second and third waves. Furthermore, in the aftermath of the pandemic development, an increase in the volatility of stock returns can be observed in the Polish financial market. However, this effect mainly applies to the period of the first disease wave.

scholarly journals A DETERMINANTS OF FINANCIAL BEHAVIOR ON ACCOUNTING STUDENT

2020 ◽  
Vol 5 (37) ◽  
pp. 44-55
Author(s):  
Wirawan ED Radianto ◽  
Tommy C. Effrata ◽  
Liliana Dewi
Keyword(s):  
Locus Of Control ◽  
Financial Literacy ◽  
Self Efficacy ◽  
Positive Impact ◽  
Mental Accounting ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Financial Decisions ◽  
The Impact ◽  
Accounting Student

This study examines the impact of financial literacy, financial knowledge, locus of control, financial attitude, financial self-efficacy, and mental accounting on financial behavior. The study sample is an accounting student. There are 159 questionnaires that can be processed in total out of 250 distributed to the accounting selected at random. Hypothesis testing was conducted using multiple regression analysis. The result of the study shows that locus of control, financial attitude, financial self-efficacy, and mental accounting has a positive impact on financial behavior. However, this study found that financial literacy and financial knowledge do not affect financial behavior. This study also found that mental accounting has the most influence on financial behavior. This research contributes that mental accounting enables students to manage finances and make financial decisions.

scholarly journals Ownership structure and corporate performance: evidence from property and real estate public companies in Indonesia

2017 ◽  
Vol 14 (2) ◽  
pp. 252-263 ◽  
Author(s):  
Mustaruddin Saleh ◽  
Giriati Zahirdin ◽  
Ellen Octaviani
Keyword(s):  
Firm Performance ◽  
Real Estate ◽  
Ownership Structure ◽  
Corporate Performance ◽  
Random Effect ◽  
Economic Value ◽  
Value Added ◽  
Institutional Investor ◽  
Managerial Ownership ◽  
The Impact

This paper has proposed a specific case in the property and real estate sector regarding the impact of ownership structure and corporate performance, since this sector is one of those with booming investment in Indonesia. The ownership structure was represented by the institutional investor and managerial ownership, and the Economic Value Added (EVA) and Tobin’s Q were used as a proxy for firm performance. This study utilized the purposive sampling of 240 observations over the period 2010-2015. The fixed and random effect panel data model was employed to determine the relationship among the variables. Findings show that the institutional investor and company’s size, as well as debt ratio, are important in explaining firm performance, while managerial ownership has a partially significant effect on the performance of companies in this industry.

Relationship between Free Cash Flow and Corporate Performance Evidence from the Listed Real Estate Companies in China

2014 ◽  
Vol 556-562 ◽  
pp. 6445-6448
Author(s):  
Hong Zhou ◽  
Shuai Geng ◽  
Lu Zhuang Wang
Keyword(s):  
Real Estate ◽  
Financial Performance ◽  
Cash Flow ◽  
Performance Indicators ◽  
Corporate Performance ◽  
Principal Component ◽  
Free Cash Flow ◽  
And Performance ◽  
Key Indicators ◽  
The Impact

There is no consensus on the impact of free cash flow upon corporate performance. Based on the data from 2006-2012 of all listed real estate companies in China, authors studied the relationship between the free cash flow and performance of these firms. Using principal component analysis and regression analysis, key financial performance indicators were calculated out of 18 financial performance indicators, and these key indicators of sample companies were correlated to their free cash flow. The results showed that the free cash flow of a company is negatively linear-correlated to its performance, i.e., too much free cash flow will lead the corporate performance to decline. Therefore, the investors and the managers should avoid business inefficient because of too much free cash flow, which triggers the investment risk and loss.

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