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1 – 8 of 8This article aims to systematically review the literature published in recognized journals focused on cognitive heuristic-driven biases and their effect on investment management…
Abstract
Purpose
This article aims to systematically review the literature published in recognized journals focused on cognitive heuristic-driven biases and their effect on investment management activities and market efficiency. It also includes some of the research work on the origins and foundations of behavioral finance, and how this has grown substantially to become an established and particular subject of study in its own right. The study also aims to provide future direction to the researchers working in this field.
Design/methodology/approach
For doing research synthesis, a systematic literature review (SLR) approach was applied considering research studies published within the time period, i.e. 1970–2021. This study attempted to accomplish a critical review of 176 studies out of 256 studies identified, which were published in reputable journals to synthesize the existing literature in the behavioral finance domain-related explicitly to cognitive heuristic-driven biases and their effect on investment management activities and market efficiency as well as on the origins and foundations of behavioral finance.
Findings
This review reveals that investors often use cognitive heuristics to reduce the risk of losses in uncertain situations, but that leads to errors in judgment; as a result, investors make irrational decisions, which may cause the market to overreact or underreact – in both situations, the market becomes inefficient. Overall, the literature demonstrates that there is currently no consensus on the usefulness of cognitive heuristics in the context of investment management activities and market efficiency. Therefore, a lack of consensus about this topic suggests that further studies may bring relevant contributions to the literature. Based on the gaps analysis, three major categories of gaps, namely theoretical and methodological gaps, and contextual gaps, are found, where research is needed.
Practical implications
The skillful understanding and knowledge of the cognitive heuristic-driven biases will help the investors, financial institutions and policymakers to overcome the adverse effect of these behavioral biases in the stock market. This article provides a detailed explanation of cognitive heuristic-driven biases and their influence on investment management activities and market efficiency, which could be very useful for finance practitioners, such as an investor who plays at the stock exchange, a portfolio manager, a financial strategist/advisor in an investment firm, a financial planner, an investment banker, a trader/broker at the stock exchange or a financial analyst. But most importantly, the term also includes all those persons who manage corporate entities and are responsible for making their financial management strategies.
Originality/value
Currently, no recent study exists, which reviews and evaluates the empirical research on cognitive heuristic-driven biases displayed by investors. The current study is original in discussing the role of cognitive heuristic-driven biases in investment management activities and market efficiency as well as the history and foundations of behavioral finance by means of research synthesis. This paper is useful to researchers, academicians, policymakers and those working in the area of behavioral finance in understanding the role that cognitive heuristic plays in investment management activities and market efficiency.
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Wahidah Shari, Asmadi Mohamed Naim, Mohamad Yazid Isa, Mohd Fikri Sofi, Nurul Aini Muhamed, Selamah Maamor and Shahrul Nizam Ahmad
This paper aims to investigate consumers’ preferences regarding the distribution channels for subscription, contribution payment and compensation claims of microtakaful scheme in…
Abstract
Purpose
This paper aims to investigate consumers’ preferences regarding the distribution channels for subscription, contribution payment and compensation claims of microtakaful scheme in Malaysia.
Design/methodology/approach
Consumers’ preferences were explored through questionnaires and focus group discussions (FGD) conducted among the bottom 40% income classification households (B40) in five zones: northern, central, eastern, southern and Sabah and Sarawak.
Findings
Empirical findings from cross-tabulation analysis revealed that takaful company is the preferred distribution channel for purchasing protection plans and making compensation claims. However, the online platform is the favoured channel to make contribution payments. Further investigation through FGD suggested that the selection of a channel for subscription, contribution payment and compensation claim is influenced by consumer trust, cost-effectiveness and simplicity of procedure.
Research limitations/implications
Limitation is pertaining to only cross-tabulation analysis used in explaining the choice of distribution channel for microtakaful among B40 group. Thus, advanced analysis is required to strengthen the findings.
Practical implications
Findings of this study would help marketers and practitioners to formulate strategies to promote their microtakaful protection to enhance subscription among the low-income population.
Originality/value
Empirical findings offer academic contributions to the existing body of knowledge on microtakaful area as the primary data collected will eventually allow future researchers to explicate the contribution of the current study to understand the important of distribution channel for microtakaful from the perspective of subscribers and potential subscribers.
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Robert Kwame Dzogbenuku, George Kofi Amoako and Albert Martins
This study seeks to assess the mediating role of financial service branding on investment decisions from the perspective of financial service investors.
Abstract
Purpose
This study seeks to assess the mediating role of financial service branding on investment decisions from the perspective of financial service investors.
Design/methodology/approach
Field data were obtained from 403 individuals and corporate investors in financial service institutions who invested savings and pensions funds into short to medium term financial instruments from an emerging market in sub-Saharan Africa (SSA). Data were analysed using the partial least squares structural equation modelling technique (PLS-SEM).
Findings
Branding significantly mediates return on investment (ROI) decisions. However, the ROI did not have a significant direct effect on investment decisions. ROI has a significant indirect effect on investment decisions due to branding influence on investors.
Research limitations/implications
Data collected was cross sectional. Future research can use longitudinal data for better long term planning. Study can also be done in other emerging economies to determine how the financial sector characteristics for each country can be a source of difference from branding and investment standpoint.
Practical implications
Although consumer investment decisions are logically influenced largely by ROI, investors place savings and pensions into financial instruments largely managed by reliable corporate brands with solid reputation known as safe havens for hedging lifetime investments.
Originality/value
This study covers the research gap in brand power and the reputation of financial service institutions as well as the investment decisions of financial service investors in emerging Sub-Saharan African.
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Idrees Waris, Norazah Mohd Suki, Adeel Ahmed and Waseem Barkat
Environmental issues have triggered the need for sustainable behavior around the globe. The tourism industry’s rapid growth also contributes to environmental degradation through…
Abstract
Purpose
Environmental issues have triggered the need for sustainable behavior around the globe. The tourism industry’s rapid growth also contributes to environmental degradation through natural resource depletion and excess water and energy utilization. Based on social identity theory, this study aims to assess the impact of environmental corporate social responsibility initiatives on green customers’ citizenship behavior. Furthermore, the study assesses the mediating effects of green trust, customer–company identification and green image.
Design/methodology/approach
This study is a quantitative approach, and purposive sampling technique was used to collect the data from the hotels’ customers from northern areas of Pakistan. This study used partial least square-structural equation modeling to analyze the data of 426 customers.
Findings
The study’s findings show that environmental corporate social responsibility initiatives significantly impact green customers’ citizenship behavior, green trust, customer–company identification and green corporate image. However, the relationship between green corporate image and green customers’ citizenship behavior was insignificant. Furthermore, the study’s results revealed that green trust and customer–company identification partially mediate between environmental corporate social responsibility initiatives and green customers’ citizenship behavior.
Practical implications
The findings suggest that hotels’ environmental corporate social responsibility initiatives improve green customer citizenship behavior, green trust and enhance customer–company identification. Therefore, hotel industry managers should consider reinforcing existing environmental corporate social responsibility initiatives and make further efforts to highlight the importance of such initiatives for environmental sustainability, which ultimately affects customers’ green customer citizenship behavior.
Originality/value
This research developed a novel framework to understand green customers’ citizenship behavior in the tourism industry. It extended the literature on environmental corporate social responsibility initiatives and green customers’ citizenship behavior. In addition, the research adds value by confirming the significant direct and mediating role of customer–company identification in tourism industry context.
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Rajat Subhra Chatterjee, Naveed R. Khan, Irfan Hameed and Idrees Waris
This study aims to emphasize the youth community’s importance in sustaining green entrepreneurial efforts. The study used the stimulus organism response framework as the…
Abstract
Purpose
This study aims to emphasize the youth community’s importance in sustaining green entrepreneurial efforts. The study used the stimulus organism response framework as the theoretical base using two separate studies.
Design/methodology/approach
Study 1 commences the development of the student green engagement construct through a focus group, panel discussion and exploratory factor analysis, which supported five items. Study 2 measures the relationship of student green engagement with green entrepreneurial intention by mediating university entrepreneurial support and entrepreneurial motivation. Data from 448 students were gathered from five Malaysian private institutions using a purposive sampling technique.
Findings
Findings indicate a robust association of student green engagement (stimuli) with green entrepreneurial intention (organism). Furthermore, mediation analysis shows strong mediating effects of university entrepreneurial support and entrepreneurial motivation on green entrepreneurship behavior (response).
Originality/value
The study’s findings can help the universities and concerned governmental departments instill a sense of sustainable entrepreneurship in university students.
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Juhari Noor Faezah, Mohd Yusoff Yusliza, Richa Chaudhary, T. Ramayah and Olawole Fawehinmi
This study aims to investigate the influence of green human resource management (Green HRM) on employee ecological behaviour (EEB) using the mediating role of green commitment.
Abstract
Purpose
This study aims to investigate the influence of green human resource management (Green HRM) on employee ecological behaviour (EEB) using the mediating role of green commitment.
Design/methodology/approach
Data were gathered using convenience sampling by surveying 308 academicians in five public research universities across Malaysia. Partial least squares structural equation modelling (PLS-SEM) tested the hypothesised model.
Findings
The results offered support for the hypotheses. Green HRM was related positively to EEB, and Green HRM influenced EEB indirectly via green commitment.
Practical implications
This study has significant implications for policymaking regarding higher education institutions that maintain an eco-friendly environment in Malaysia. The study offers guidelines to decision makers for enhancing EEB and environmental commitment in the workplace.
Originality/value
This study contributes to the current literature on green behaviour and Green HRM by examining these relationships and testing the mediation effect of green commitment from the developing economy of Malaysia. It also offers guidelines for policymakers and HR practitioners to promote environmental friendliness at work and create an environmentally friendly organisational culture.
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Susanne Durst, Ingi Runar Edvardsson and Samuel Foli
The purpose of this paper is to structure existing research on knowledge management (KM) in small- and medium-sized enterprises (SMEs) to offer a comprehensive overview of…
Abstract
Purpose
The purpose of this paper is to structure existing research on knowledge management (KM) in small- and medium-sized enterprises (SMEs) to offer a comprehensive overview of research strands and topics in KM in SMEs to determine their evolution over time.
Design/methodology/approach
The paper, which is considered a follow-up literature review, is based on a systematic literature review that covers 180 scientific papers that were published since the review paper by Durst and Edvardsson in 2012 that covered 36 papers.
Findings
The findings of this review and those of the aforementioned review are brought together in the form of an overview that structures research on KM in SMEs based on themes that, in turn, allow the derivation of promising research directions and research questions aimed at structuring future research on KM in SMEs.
Originality/value
By combining the findings of this review with the findings from the review published in this journal in 2012, this paper offers, to the best of the authors’ knowledge, the most comprehensive literature review on KM in SMEs produced to date.
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