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Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).
The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.
This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.
This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable…
This paper aims to give a brief review on behavioral economics and behavioral finance and discusses some of the previous research on agents' utility functions, applicable risk measures, diversification strategies and portfolio optimization.
The authors also cover related disciplines such as trading rules, contagion and various econometric aspects.
While scholars could first develop theoretical models in behavioral economics and behavioral finance, they subsequently may develop corresponding statistical and econometric models, this finally includes simulation studies to examine whether the estimators or statistics have good power and size. This all helps us to better understand financial and economic decision-making from a descriptive standpoint.
The research paper is original.
Organizational Development and Change (ODC) has been called to aid organizational greening goals. Carbon labeling of products by organizations is a common greening…
Organizational Development and Change (ODC) has been called to aid organizational greening goals. Carbon labeling of products by organizations is a common greening strategy. However, its effectiveness is dependent on supportive consumer behavior. The Theory of Planned Behavior (TPB) is used to explain actor choice in buying low carbon products (LCPs). Actual buying behavior of 873 subjects in China, a country new to carbon labeling, demonstrated that Declarative norms, Attitude, and Perceived behavioral control explained significant variance in actual buying behavior of LCPs. The TPB model may be better served by observing actual behavior versus behavioral intention. Revisions to the TPB model for diagnosis and interventions in behavioral change are indicated. ODC should revert to theoretically informed practice versus the increasing reliance on A-theoretical tools and techniques.
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over…
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over time, and regarding other people. A new perspective on two underlying methodological issues, i.e., inter-disciplinarity and the positive/normative distinction, is proposed by following the entanglement thesis of Hilary Putnam, Vivian Walsh, and Amartya Sen. This thesis holds that facts, values, and conventions have inter-dependent meanings in science which can be understood by scrutinizing formal and ordinary language uses. The goal is to provide a broad and self-contained picture of how behavioral economics is changing the mainstream of economics.
In this chapter, I draw from theory and research on intergroup relations and decoupling to critique prevailing conceptions of behavioral strategy, and then propose a…
In this chapter, I draw from theory and research on intergroup relations and decoupling to critique prevailing conceptions of behavioral strategy, and then propose a viable alternative. I suggest that prevailing definitions of behavioral strategy exclude or marginalize theoretical perspectives that should logically be included, which has (1) created undesirable ingroup/outgroup dynamics in the strategy field and (2) resulted in decoupling between behavioral strategy as defined by category leaders and the actual content of research conducted by category members. I contend that this state of affairs has likely reduced the impact of behavioral strategy on other disciplines, and also likely constrained its impact on non-academic audiences. As an alternative, I propose a more interdisciplinary approach that involves identifying behavioral mechanisms that explain how social and psychological processes at different levels of analysis interact and interrelate to affect strategy and performance.
The purpose of this paper is to study and describe several biases in investment decision-making through the review of research articles in the area of behavioral finance…
The purpose of this paper is to study and describe several biases in investment decision-making through the review of research articles in the area of behavioral finance. It also includes some of the analytical and foundational work and how this has progressed over the years to make behavioral finance an established and specific area of study. The study includes behavioral patterns of individual investors, institutional investors and financial advisors.
The research papers are analyzed on the basis of searching the keywords related to behavioral finance on various published journals, conference proceedings, working papers and some other published books. These papers are collected over a period of year’s right from the time when the most introductory paper was published (1979) that contributed this area a basic foundation till the most recent papers (2016). These articles are segregated into biases wise, year-wise, country-wise and author wise. All research tools that have been used by authors related to primary and secondary data have also been included into our table.
A new era of understanding of human emotions, behavior and sentiments has been started which was earlier dominated by the study of financial markets. Moreover, this area is not only attracting the, attention of academicians but also of the various corporates, financial intermediaries and entrepreneurs thus adding to its importance. The study is more inclined toward the study of individual and institutional investors and financial advisors’ investors but the behavior of intermediaries through which some of them invest should be focused upon, narrowing down population into various variables, targeting the expanding economies to reap some unexplained theories. This study has identified 17 different types of biases and also summarized in the form of tables.
The study is based on some of the most recent findings to have a quick overview of the latest work carried out in this area. So far very few extensive review papers have been published to highlight the research work in the area of behavioral finance. This study will be helpful for new researches in this field and to identify the areas where possible work can be done.
Practical implication of the research is that companies, policymakers and issuers of securities can watch out of investors’ interest before issuing securities into the market.
Under the Social Implication, investors can recognize several behavioral biases, take sound investment decisions and can also minimize their risk.
The essence of this paper is the identification of 17 types of biases and the literature related to them. The study is based on both, the literature on investment decisions and the biases in investment decision-making. Such study is less prevalent in the developing country like India. This paper does not only focus on the basic principles of behavioral finance but also explain some emerging concepts and theories of behavioral finance. Thus, the paper generates interest in the readers to find the solutions to minimize the effect of biases in decision-making.
The general theory of behavioral strategies includes a set of propositions supporting alternative configurations of objectives, contextual features, and…
The general theory of behavioral strategies includes a set of propositions supporting alternative configurations of objectives, contextual features, and beliefs/assessments by executives. The theory includes the outcomes of selections of specific decision alternatives. Building behavioral-strategy models in contexts enriches one or more goals of science and practice: description, understanding, prediction, and influence/control. This chapter is a primer to the general theory. A brief review of relevant empirical studies supports the general theory. The empirical studies include the use of alternative data collection and analytically tools including true field experiments, think aloud methods, long interviews, statistical hypothesis testing, ethnographic decision tree modeling, and building and testing algorithms (e.g., qualitative comparative analysis, QCA). The general theory is the blending of cognitive science, economics, marketing, psychology, and implemented practices in explicit contexts. Consequently, behavioral-strategy theory is distinct from context-free microeconomics, market-driven, and competitor-only decision-making. Capturing and reporting contextually driven alternative routines to strategy setting by a compelling set of propositions represents what is particularly new and valuable about the general theory. The general theory serves as a useful foundation for advances theory and improving the practice of implemented strategies.
This paper aims to explore the relevance of bounded rationality to the practice of institutional investors in Malaysia. Understanding institutional investor behavior is…
This paper aims to explore the relevance of bounded rationality to the practice of institutional investors in Malaysia. Understanding institutional investor behavior is important, as it can determine the asset prices and consequently the market behavior.
A set of questionnaires is used to solicit information regarding the understanding and practical application of behavioral finance theories and strategies among fund managers in the Malaysian investment management practice. In the process, bounded rational theory is aimed to be validated. Fund managers’ possible bounded rational behavior is assessed with reference to their investment management approaches and strategies right from individual beliefs and acquisition of information, as well as investment management and strategies used.
The findings lend support to the notion that institutional investors too, being normal human beings, are expected to think and behave in a boundedly rational manner as postulated in bounded rational theory. The sources of bounded rationality are individual, institutional and social forces. Thus, portfolio trading and investment management strategies are exposed to wide varieties of behavioral risks. Despite the notions that behavioral risks are real and the impact on fund performance could be pervasive, fund managers’ self-awareness regarding control and institutional readiness to govern behavioral risks in investment practices is still low.
Empirical evidence drawn in the current paper is subjected to small sample size and specific focus on Malaysian context. Despite this limitation, the sample is statistically sufficient and provides a fair representation, as well as quality opinions, of fund manager’s investment management behavior in Malaysia. This research provides valuable implications to practitioners (fund managers) and regulators (investment management and capital market policymakers). In practice, the current study draws some practical ideas, especially for buy-side institutional investors, on the source and impact of behavioral biases on fund management practices and performance. For regulators, this research highlighted the needs and possible ways to regulate these behavioral risks.
The current paper provides new insights on the theory and practice of the institutional investor. In theory, this research provides evidence of bounded rationality of institutional investor behavior, practicing in the asset management industry in the emerging markets of Malaysia. This evidence lends support to the validity of the bounded rationality theory in explaining institutional investor behavior. In practice, thisresearch provides new insights on the relevance of behavioral finance perspectives and strategies in the asset management industry practice and policy.
In the past decade, the effectiveness and efficiency foreign aid (Aid Industry) has generated considerable debate in both of the academic and popular press. Despite…
In the past decade, the effectiveness and efficiency foreign aid (Aid Industry) has generated considerable debate in both of the academic and popular press. Despite spending billions of dollars in foreign aid well over a billion people remain in extreme poverty. This paper did not intend to question the magnitude of the effort or the motives of donors or aid agencies, but rather why the aid programs have not been more effective.
Certain research in behavioral economics, pathological altruism, and emotional empathy may help provide answers. Common to these theories is the idea that well-intentioned actions or policies may cause unintended, harmful consequences to either the donors or the intended beneficiaries of these actions or policies. This paradoxical result is typically due to the altruist’s inability to properly analyze the situation for a variety of reasons. The Aid Industry may be particularly susceptible to these behavioral biases and thus is likely to suffer to some extent from unintended adverse consequences.
This paper focused on ethical considerations at the microlevel, that is, the paper considered the impact of aid on individual’s economic utility and human dignity as opposed to macromeasures such as gross domestic product. Our purpose was to examine how behavioral theories can improve foreign aid efficiency and effectiveness. Using specific examples and considering ethical arguments based on utility and rights theories, we illustrated how these behavioral theories help explain the Aid Industry’s suboptimal results.