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Advances in Behavioural Finance and Economics

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A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: closed (23 October 2020) | Viewed by 61125

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Special Issue Editors

Prof. Dr. Tomas Kliestik

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Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia
Interests: financial management; behavioral finance; econometric models; credit risk
Special Issues, Collections and Topics in MDPI journals

Dr. Maria Kovacova

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Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia
Interests: financial markets; financial econometrics; bankruptcy prediction; credit risk
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Dr. Katarina Valaskova

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Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia
Interests: international financial markets; behavioural decision making; risk modelling; risk analysis; financial statistics
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

For quite a long time, financial decision-making has followed the traditional theory of finance. The traditional theory considers a given subject’s aversion to risk as an unchanging variable, and its basic principles include the fact that people choose from possible alternatives to maximize their expected profits. In 1979, Tversky and Kahneman introduced prospect theory, which states that people underweight outcomes that are merely probable in comparison with outcomes that are obtained with certainty. Further, the model considers that people generally discard components that are shared by all prospects under consideration.

Subsequently, behavioural finance theory introduced psychology behaviour science theory into finance in order to use its pioneering view to re-examine investment behaviour in financial markets. Therefore, behavioural finance holds important implications for the practice of financial management and innovation in finance and economics.

This Special Issue will publish papers related to advances in behavioural finance and economics. We are particularly interested in papers covering (1) behavioral economics and finance, (2) collaborative economics, and (3) financial markets.

We invite investigators to contribute original research articles involving theory, practice, and applications on behavioral finance and economics. All submissions must contain original unpublished work that is not being considered for publication elsewhere.

This is Special Issue is a cooperative project with Globalization and Its Socio-Economic Consequences 2019 (https://globalization.uniza.sk/)

Prof. Dr. Tomas Kliestik
Dr. Maria Kovacova
Dr. Katarina Valaskova
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. International Journal of Financial Studies is an international peer-reviewed open access quarterly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

business economics and finance
corporate finance and government
accounting and taxes in the global economy
risk management
financial markets
public finance management
information systems
collaborative digital economy, main attributes and challenges
strategic management
digital environment and social networks
sharing economy business models
business information systems

Published Papers (12 papers)

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Research

15 pages, 847 KiB

Open AccessArticle

Exploring Investment Behavior of Women Entrepreneur: Some Future Directions

by Umair Baig, Batool Muhammad Hussain, Vida Davidaviciene and Ieva Meidute-Kavaliauskiene

Int. J. Financial Stud. 2021, 9(2), 20; https://doi.org/10.3390/ijfs9020020 - 01 Apr 2021

Cited by 5 | Viewed by 5867

Abstract

This study aims to explore the investment behavior of female entrepreneurs as the new competitor in the investment field and to determine the underlying factors that influence their investment attitudes. A qualitative investigation approach was employed for the study that includes 18 in-depth exploratory interviews to ascertain the fundamental determinants of the investment behavior represented by female entrepreneurs, an emergent section in investment. The accumulated data was analyzed through manual coding procedures. The study revealed that female entrepreneurs are not inclined to take risk in their business for investment decisions, they are somewhat conservative and risk averse. This research also asserts that if they spend quality time and get better training about the nuances of different investment tools, so they will also take risks in investment activities. Two big cosmopolitan cities Karachi and Lahore in Pakistan were selected as sample for this study. Research in other countries considering the culture and ethnicity must be conducted to expand the scope of understanding the investment behaviors of female entrepreneurs. This study outcomes would help the investment manager to understand women’s psychology to develop significant portfolio recommendations, service providers to develop consultancy training centers, policy makers to mitigate their risk and maximize their return opportunities. Hence, intending to provide opportunities for gender equalities, this research appears to be the first in Pakistan to adopt the inductive approach in this domain. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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16 pages, 1349 KiB

Open AccessArticle

The Moderating Role of Perceived Risks in the Relationship between Financial Knowledge and the Intention to Invest in the Saudi Arabian Stock Market

by Saleh M. Shehata, Alaa M. Abdeljawad, Loqman A. Mazouz, Lamia Yousif Khalaf Aldossary, Maryam Y. Alsaeed and Mohamed Noureldin Sayed

Int. J. Financial Stud. 2021, 9(1), 9; https://doi.org/10.3390/ijfs9010009 - 28 Jan 2021

Cited by 26 | Viewed by 6648

Abstract

This research study aims to investigate the moderating role of perceived risks in the relationship between financial knowledge (represented by objective knowledge and subjective knowledge) and the intention to invest in the Saudi Arabian Stock Market. The researcher collected data from four hundred Saudi Arabian participants who were interested in investing in the Saudi Arabian Stock Market. The researcher used structural equation modeling (SEM) through the Smart PLS 3.3.2 software to analyze the data. This study’s findings indicate that, in the formation of financial knowledge, the total effect of Subjective knowledge is greater than the total effect of objective knowledge. The findings also indicate that there is a positive relationship between financial knowledge and perceived risks and between financial knowledge and the intention to invest. Finally, the findings indicate that perceived risks have a negative effect on the relationship between financial knowledge and the intention to invest in the Saudi Arabian Stock Market. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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11 pages, 555 KiB

Open AccessArticle

Analysis of Volatility Volume and Open Interest for Nifty Index Futures Using GARCH Analysis and VAR Model

by Parizad Phiroze Dungore and Sarosh Hosi Patel

Int. J. Financial Stud. 2021, 9(1), 7; https://doi.org/10.3390/ijfs9010007 - 14 Jan 2021

Cited by 6 | Viewed by 4189

Abstract

The generalized autoregressive conditional heteroscedastic model (GARCH) is used to estimate volatility for Nifty Index futures on day trades. The purpose is to find out if a contemporaneous or causal relation exists between volatility volume and open interest for Nifty Index futures traded on the National Stock Exchange of India, and the extent and direction of these relationships. A complete absence of bidirectional causality in any particular instance depicts noise trading and empirical analysis according to this study establishes that volume has a stronger impact on volatility compared to open interest. Furthermore, the impulse originating from volatility of volume and open interest is low. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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13 pages, 422 KiB

Open AccessArticle

Compensations of Top Executives and M&A Behaviors: An Empirical Study of Listed Companies

by Jiao Xue, Heng Fan and Zhanxun Dong

Int. J. Financial Stud. 2020, 8(4), 64; https://doi.org/10.3390/ijfs8040064 - 23 Oct 2020

Cited by 1 | Viewed by 2715

Abstract

This study empirically examines the relationship between executive compensation and mergers and acquisitions (M&A) behaviors by identifying the influence of short- and long-term incentive on the propensity and scale of M&A. When the short-term incentive is insufficient, M&A behaviors serve as a beneficial compensation mechanism. Thus, lack of executives’ incentive promotes the propensity to engage in M&A and significantly affects the scale of M&A. With regard to long-term incentives, M&A behaviors serve as a beneficial creation mechanism. Shareholding of executives promotes M&A propensity, and does not significantly affect the scale of M&A. This study significantly contributes to research in M&A behaviors by revealing the beneficial distribution mechanisms of M&A behaviors. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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13 pages, 289 KiB

Open AccessArticle

Audit of Museum Marketing Communication in the Modern Management Context

by Václav Kupec, Michal Lukáč, Peter Štarchoň and Gabriela Pajtinková Bartáková

Int. J. Financial Stud. 2020, 8(3), 39; https://doi.org/10.3390/ijfs8030039 - 03 Jul 2020

Cited by 11 | Viewed by 5438

Abstract

Marketing communication is a concise part of modern museum management. Museums operate in a competitive environment; therefore, it is important to pay sustained attention to every component of a given museum’s marketing communication. Changes, international trends, and visitor preferences have an influence on marketing communication. Museum management must devote expert deliberation towards determining which components of their marketing communication are significant for museum visitors. Moreover, the effectiveness of the use of expenses plays an important role in museum management; it is also essential to combine effectively the individual components of marketing communication. The present research aims to find a correlation between the components of museum marketing communication, which is not being addressed in detail in the contemporary research. The aim of the research is therefore to determine the dependence amongst elements of the marketing communication of museums on questioning the visitors. The aim was achieved by implementing the modern audit approach and empirical research into marketing communication: the Paper Aided Personal Interview (PAPI) method with a Likert scale, a reliability check with Cronbach’s alpha, and dependency determination with Pearson’s correlation. All results were investigated through the use of a questionnaire on the international EU 27 sample of museum visitors. These conclusions allow museum management to build their marketing communication on the principles of Economy, Efficiency, and Effectiveness (the 3E principles). Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

14 pages, 628 KiB

Open AccessArticle

Investor Sentiment and Herding Behavior in the Korean Stock Market

by Ki-Hong Choi and Seong-Min Yoon

Int. J. Financial Stud. 2020, 8(2), 34; https://doi.org/10.3390/ijfs8020034 - 01 Jun 2020

Cited by 27 | Viewed by 6645

Abstract

This paper investigates herding behavior and the connection between herding behavior and investor sentiment. We apply a Cross-Sectional Absolute Deviation (CSAD) approach and the quantile regression method to capture herding behavior in the KOSPI and KOSDAQ stock markets. The analysis results are outlined as follows. First, we find that herding behavior is exhibited during down-market periods in the KOSPI and KOSDAQ stock markets. However, we show that adverse herding behavior occurs in low-trading volume and low-volatility periods. Second, according to the results of the quantile regression, herding behavior is found in the low and high quantiles of the KOSPI and KOSDAQ stock markets. However, adverse herding behavior is also found, which means that investors herd in extreme market conditions. Third, the relationship between investor sentiment and herding behavior is analyzed through regression and quantile regression, and investor sentiment is confirmed to be one of the important factors that can cause herding behavior in the Korean stock market. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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10 pages, 219 KiB

Open AccessArticle

Towards Improving Households’ Investment Choices in Tanzania: Does Financial Literacy Really Matter?

by Josephat Lotto

Int. J. Financial Stud. 2020, 8(2), 29; https://doi.org/10.3390/ijfs8020029 - 18 May 2020

Cited by 5 | Viewed by 3041

Abstract

This paper primarily aims to assess the impact of financial literacy on households’ investment choices. The paper employs secondary data from the FinScope survey (2017) conducted by Financial Sector Deepening Trust (FSDT). In particular, the study aims at establishing whether the choices of investment platforms are influenced by the financial literacy level of the heads of households. To do so, the study employed both bivariate and multivariate analytical techniques. The study finds that financial literacy is positively and significantly associated with household investment choices. More specifically, as households become more financially literate, they divert from investing in informal groups towards more formal investment platforms such as investment accounts, agricultural ventures as well as personal business. Such observations may be partly attributable to the facts that individuals whose financial literacy is sound enough are more likely to be equipped with skills and knowledge of risks associated with investment opportunities and some other several financial products. The study also reveals that financial literacy is significantly associated with households’ socio-demographic factors, and that the adult population exhibits a large financial literacy gap and, therefore, adults should not be considered as a homogenous group—instead, gender, age, education and income levels of the households, which are showcased in this study, should also be taken into consideration. The study opines that, because most of households, as revealed in the survey from which the employed dataset is based, are hailing from rural settings where agriculture is the main economic activity, we establish that agricultural ventures require a complete revamp for Tanzania to become a middle-income economy through its industrialization agenda. The study also proposes the financial literacy programmes to be rolled on to students from early stage of their education such as secondary schools. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

23 pages, 6115 KiB

Open AccessArticle

Disclosure of Strategic Managers’ Factotum: Behavioral Incentives of Innovative Business

by Pavol Durana, Katarina Valaskova, Ladislav Vagner, Silvia Zadnanova, Ivana Podhorska and Anna Siekelova

Int. J. Financial Stud. 2020, 8(1), 17; https://doi.org/10.3390/ijfs8010017 - 13 Mar 2020

Cited by 29 | Viewed by 5449

Abstract

Many kinds of research has suggested that innovation is positively linked to business performance and that it acts as an intermediary between organizational variables and financial performance measured by earnings achieved. Researchers worldwide have paid great attention to identifying and exploiting the main drivers of innovation management, which has led to many research articles that have adopted different approaches and identified several factors that are related to innovation. Nevertheless, there is some ambiguity about the critical behavioral factors for innovation. Therefore, this study aims to identify behavioral incentives, or key factors, that impact business innovation and financial stability, mainly in the field of strategic management, and to reveal the latest trend in corporate innovation policy by using bibliographic mapping. The purpose is to precisely define specific incentives that can influence the overall productivity and profitability of a business, and this list of innovation factors can be of benefit to a strategic manager in introducing or supporting innovative activities. The analysis is preceded by an in-depth study of publications from the Web of Science and Scopus databases and based on the VOS Viewer method (which is a mapping and clustering program for network data), the available keywords are analyzed, and then a list of incentives in strategic innovation is compiled. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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9 pages, 244 KiB

Open AccessArticle

Market Orientation and Marketing Innovation Activities in the Czech Manufacturing Sector

by Marek Vokoun and Romana Píchová

Int. J. Financial Stud. 2020, 8(1), 10; https://doi.org/10.3390/ijfs8010010 - 18 Feb 2020

Cited by 4 | Viewed by 2834

Abstract

Market competition drives organizations to higher efficiency. This paper analyses the relationship between the prevailing organization’s market orientation and marketing innovation activities. The sample of organizations consists of business enterprises from the manufacturing sector in the Czech economy. Data come from the Community Innovation Survey in 2014 and are analyzed using the innovation process econometric modeling. This innovation survey covers the period of a 3 year J-curve of real GDP growth. Czechia is one of the most open economies in the world and has one of the largest shares of exports and imports to GDP. This paper evaluates four types of marketing innovation activities (design, pricing, placing and promotion methods) at the enterprise level as a factor of marketing capability. The analyzed sample consists of observations about new-to-the-market innovators and enterprises that did not engage in new-to-the-market innovation activities in the last three years. The second group are considered to be lower-level innovators, i.e., adaptors to technological change. This paper explores the relationship between local, national, European and World market orientation in addition to an enterprise’s marketing innovation activities. The results suggest that not all types of marketing innovations are dependent on market orientation, while some have indirect positive and negative effects. Feedback and the future effects of marketing innovation activities are present at the enterprise level. Results also suggest that the marketing innovations of innovators form the manufacturing sector while they are dependent upon the strategies of enterprises to enter new geographical markets and gain the motivation to unlock new (hidden) demand. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

14 pages, 1139 KiB

Open AccessArticle

Determinants of Indebtedness: Influence of Behavioral and Demographic Factors

by Mahfuzur Rahman, Nurul Azma, Md. Abdul Kaium Masud and Yusof Ismail

Int. J. Financial Stud. 2020, 8(1), 8; https://doi.org/10.3390/ijfs8010008 - 10 Feb 2020

Cited by 19 | Viewed by 7051

Abstract

This study aims to examine the influence of behavioral and demographic factors on indebtedness by constructing a model using specific determinants. The exploratory method is used through the partial least square (SmartPLS) technique, by surveying 320 respondents in Kuala Lumpur, Malaysia. A self-administered questionnaire was administered to respondents, addressing both demographic and behavioral factors. The results confirmed four of the eight hypotheses stated. Among the determinants, risk perception had a highly significant relationship with both materialism and emotion, while indebtedness had a relationship with emotion and materialism. The findings also indicated that significant differences exist between indebtedness and behavioral factors on the basis of gender, marital status, age, income, and dependence on credit cards and loans. The results may assist various economic players to design better models for credit offerings and address the credit problem in the long term. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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17 pages, 284 KiB

Open AccessArticle

Global Economy: New Risks and Leadership Problems

by Viacheslav M. Shavshukov and Natalia A. Zhuravleva

Int. J. Financial Stud. 2020, 8(1), 7; https://doi.org/10.3390/ijfs8010007 - 04 Feb 2020

Cited by 9 | Viewed by 4711

Abstract

After the global crisis of 2008–2009, the world economy entered the era of restructuring. This article focuses on the risks that a new leader will face in the process of shaping the world economy. The methods employed in the research include big data processing of continuous change and the results of the symmetric macroeconomic analysis based on the statistics collected by the International Monetary Fund (IMF), The Word Bank (WB), Bank for International Settlements (BIS), Central banks and Treasuries. The study results proved that the recessionary processes, their depth and global nature, are caused by a combination of world financial system crises and general civilization problems. These new systemic risks for the world economy might result in new global crises that will limit the resources of international financial institutions for sustainable development. Besides, for most banks these crises will mean shifting a big share of derivatives to the off-balance liabilities, using Special Purpose Vehicle (SPV) in deals, followed by an increase in state and corporate debts, trade wars, a slowdown of economic development in China, and widening contradictions between global and national finances. Regular research and systematization have developed certain guidelines for the global economic restructuring process. First of all, it is recommended on the base of interstate compromises to focus on international agreements to ensure a solid foundation for global finance. On the basis of the comparative analysis carried out for the USA, China and other counties, it was made clear that no one leader in world economy in 21st century views the world reserve as based on the currency of one country only. Instead, there will be a slow transition to using Special Drawing Rights (SDR) with a basket from 15–20 currencies G20. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

14 pages, 1750 KiB

Open AccessArticle

The Effects of Extreme Weather Conditions on Hong Kong and Shenzhen Stock Market Returns

by Zhuhua Jiang, Sang Hoon Kang, Chongcheul Cheong and Seong-Min Yoon

Int. J. Financial Stud. 2019, 7(4), 70; https://doi.org/10.3390/ijfs7040070 - 09 Dec 2019

Cited by 6 | Viewed by 3280

Abstract

We investigate the impact of extreme weather conditions on the stock market returns of the Hong Kong Stock Exchange and Shenzhen Exchange. For the weather conditions, we apply dummy variables generated by applying a moving average and moving standard deviation. Our study provides two interesting results. First, extreme weather conditions have a significant impact on the stock returns of the Shenzhen Exchange, indicating that the Shenzhen market is inefficient. Second, during the pre-QFII period, extreme weather conditions have a strong impact on the returns of the Shenzhen stock market, but the impact is significantly weaker in the period after QFII. This means that the efficiency of the Shenzhen stock market has significantly increased since the QFII program due to the market openness to foreign institutional investors. We emphasize the role of foreign investors not affected by local weather conditions by observing how market opening affects extreme weather impacts on stock market returns. Full article

(This article belongs to the Special Issue Advances in Behavioural Finance and Economics)

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