Search results

1 – 10 of over 2000
Article
Publication date: 25 January 2024

Kristjan Pulk and Leonore Riitsalu

Consumer culture is promoting immediate gratification, and the rise of digital financial services is increasing the risk of indebtedness while debt reduces well-being and affects…

Abstract

Purpose

Consumer culture is promoting immediate gratification, and the rise of digital financial services is increasing the risk of indebtedness while debt reduces well-being and affects mental health. The authors assess the effects of consumer information provision, debt literacy, chronic debt and attitudes toward debt on the intent to purchase on credit.

Design/methodology/approach

An online survey including an experiment with a credit offer vignette was conducted in a representative sample of Estonia (n = 1204). Treatment conditions depicted either the total cost and duration of the credit agreement or the annual percentage rate.

Findings

Receiving modified information resulted in a 26 to 30 percentage points decrease in propensity to purchase on credit. Purchasing on credit was associated with attitudes towards credit and chronic debt, but not with debt literacy.

Research limitations/implications

The findings reveal large effects of information provision and highlight the limited effects of debt literacy on credit decisions. Limitations may emerge from differences in financial regulation across countries.

Practical implications

The authors' results highlight the importance of applying behavioural insights in consumer credit information provision, both in the financial sector and policy. Testing the messages allows having evidence-based solutions that promote responsible purchasing on credit.

Originality/value

The findings call for changes in credit information provision requirements. Their effect is significantly larger compared to the literature, emphasizing the role of credit information provision in less regulated online markets.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

Keywords

Open Access
Article
Publication date: 3 January 2023

Magnus Jansson, Magnus Roos and Tommy Gärling

This paper aims to investigate whether loan officers' risk taking in credit decisions are associated with their personal financial risk preference and personality traits or solely…

3224

Abstract

Purpose

This paper aims to investigate whether loan officers' risk taking in credit decisions are associated with their personal financial risk preference and personality traits or solely with bank-contextual and loan-relevant factors.

Design/methodology/approach

An online survey administered in six large Swedish banks to 163 loan officers responsible for assessing credit risk and approval of loan applications. The loan officers rated their likelihood of approving fictitious loan applications from business companies.

Findings

The loan officers' credit risk taking is associated with bank-contextual factors, directly with perceived organizational credit risk norms and indirectly with self-confidence in assessing credit risks through attitude to credit risk taking. A direct association is also found with personal financial risk preference but not with personality traits.

Research limitations/implications

Increased awareness of that loan officers' personal financial risk preference is associated with their credit risk taking in loan decisions but that the banks' risk policy has a stronger association. Banks' managements and boards should therefore assure that their credit risk policy is implemented, followed and being aligned with their performance incentives.

Practical implications

Increased awareness of that loan officers' credit risk taking is associated with personal financial risk preference but more strongly with the banks' risk policy that motivate banks' managements and boards to assure that their credit risk policy is implemented, followed and being aligned with their performance incentives.

Originality/value

The first study which directly compare the associations of loan officers' risk taking in credit approvals with personal risk preference and personality traits versus bank-contextual factors and loan-relevant information.

Details

Managerial Finance, vol. 49 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 21 August 2023

Katariina Juusola, Kwabena G. Boakye, Charles Blankson and Guangming Cao

This study aims to develop and validate a cross-national framework to identify the motivation underpinning consumers' (i.e. the general public's) loyalty toward credit card usage…

Abstract

Purpose

This study aims to develop and validate a cross-national framework to identify the motivation underpinning consumers' (i.e. the general public's) loyalty toward credit card usage. The following research questions guided the study: (1) What factors motivate consumers to stay loyal to their credit card? (2) Does the investment model (regarding satisfaction and investment size) mediate the relationship between factors motivating consumers to stay loyal to their credit card?

Design/methodology/approach

This study employs the investment model theory (Rusbult, 1980) as a theoretical framework and uses structural equation modeling to develop and validate a cross-national framework, addressing factors that motivate consumers to stay loyal to credit card brands. In addition, the authors test the mediating effect of the investment model on the relationship. Survey data were collected from the United States and France.

Findings

The findings revealed four factors (incentives, customer service, investment size and satisfaction) that impact consumer credit card loyalty behavior in the two mature credit card markets. The authors find empirical support for two of four hypotheses. That is, investment size mediates the relationship between incentives and consumer loyalty, and satisfaction mediates the relationship between customer service and consumer loyalty. Moreover, unlike the French sample, the American sample produced a significant finding for investment size to mediate the relationship between customer service and consumer loyalty.

Originality/value

This paper validates and extends the investment model theory in the marketing of credit cards within a cross-national setting. Most studies on credit card consumption focus on the college student segment, and there is less understanding of the motivation to stay loyal to using a credit card from the general public who are not necessarily college students. Given the scarce stream of empirical studies dealing with cross-national consumer motivation, choice criteria of credit cards, and loyalty toward credit cards, this research comes at an opportune moment as credit card firms differentiate their card brands in the global marketplace. Further, a dataset originating from two mature Western economies has been put forward for the benefit of practitioners and researchers.

Details

International Journal of Bank Marketing, vol. 41 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 21 August 2023

Guanghao Wu, Xiuyi Shi and Jiajia Li

The purpose of this paper is to precisely measure the risk attitudes of Chinese agricultural laborers and then analyze the impact and mechanism of risk attitudes on the…

Abstract

Purpose

The purpose of this paper is to precisely measure the risk attitudes of Chinese agricultural laborers and then analyze the impact and mechanism of risk attitudes on the entrepreneurial choices of Chinese agricultural laborers.

Design/methodology/approach

This paper is based on the theory of expected utility function and utilizes the authoritative China Family Panel Studies (CFPS) to accurately measure the risk attitudes of 7,639 Chinese agricultural laborers through experimental methods. In the empirical analysis, this paper employed Probit, IV-Probit and mediation effect models to examine the research hypotheses.

Findings

First, agricultural laborers with the lowest risk appetite account for 54.8%, which is 8.69 times the number of agricultural laborers with the highest risk appetite. Second, agricultural laborers preferring risk are more likely to engage in entrepreneurship; this result has been validated through a series of robustness tests. Third, mechanism analysis shows that risk attitude drives the entrepreneurship of Chinese agricultural laborers through improving interpersonal trust, social interaction and formal credit behavior.

Originality/value

Existing research has mainly investigated the impact of risk attitudes on the entrepreneurial choices of the general population, with limited attention paid to agricultural laborers. The potential mechanisms in that process remain unclear, and the measurement results of risk attitude also require further precision. Based on experimental method, this paper not only helps clarify the relationship between risk attitudes and agricultural laborers entrepreneurship in China, but also provides policy recommendations to promote agricultural laborers entrepreneurship and drive rural development.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 30 January 2024

Syam Kumar and Jogendra Kumar Nayak

This study aims to establish that the relationship between the risky indebtedness behavior (RIB) of consumers and their attitude toward adopting buy-now-pay-later (BNPL) is not…

Abstract

Purpose

This study aims to establish that the relationship between the risky indebtedness behavior (RIB) of consumers and their attitude toward adopting buy-now-pay-later (BNPL) is not immediate but is mediated through impulse buying. Moreover, it explores how perceived risk moderates the association between the attitude to adopt BNPL and its adoption intention.

Design/methodology/approach

This study used the existing theoretical and empirical evidence to propose a model and validated it using the data collected from 339 young shoppers in India. Analysis of data is conducted using partial least squares structural equation modeling.

Findings

The study results show that consumers’ RIB is not directly related to their attitude toward BNPL. However, impulse buying fully mediates this relationship, influencing the attitude toward BNPL. Impulse buying and attitude serially mediate the relationship between RIB and BNPL adoption intention. Further, in the context of BNPL, perceived risk strengthens the attitude-intention gap.

Practical implications

This study advises policymakers and BNPL providers to carefully assess users’ creditworthiness to prevent those already in debt from entering into a detrimental loop.

Originality/value

This study provides novel perspectives on consumer’s RIB and BNPL within the Indian context. The study additionally identifies the mediating influence of impulse buying and the moderating effect of perceived risk on BNPL adoption intention.

Details

Asia Pacific Journal of Marketing and Logistics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 28 February 2024

Carlos Leandro Delgado Fuentealba, Jorge Andrés Muñoz Mendoza, Carmen Lissette Veloso Ramos, Edinson Edgardo Cornejo-Saavedra, Sandra María Sepúlveda Yelpo and Rodrigo Fuentes-Solís

This paper aims to analyze decisions about payment rates on credit card statements by using background factors and perceptions that indirectly influence beliefs, according to the…

Abstract

Purpose

This paper aims to analyze decisions about payment rates on credit card statements by using background factors and perceptions that indirectly influence beliefs, according to the theory of planned behavior.

Design/methodology/approach

Since legal and institutional frameworks and household financial surveys are heterogeneous among countries, household data on the Chilean economy is used as the starting point in this matter.

Findings

The probability that an individual chooses to pay amounts less than the total billing of their credit cards rises with essential variables related to perceived behavioral control. Being the head of the household, being younger, perceiving a high or excessive financial burden of debt and facing unfavorable and unexpected situations that divert the budget, among others, are relevant to repayment decisions.

Originality/value

The novelty of this article is that its psychological approach differs from the traditional focus of economic rationality regarding credit cards. The results are relevant for policymakers and financial regulators due to implications for household behavioral finance and means of payment.

Propósito

Analizamos la decisión de la tasa de pago de los estados de cuenta de tarjetas de crédito a través del uso de factores de fondo y percepciones que indirectamente inciden en las creencias de acuerdo a la teoría del comportamiento planeado.

Diseño/metodología/enfoque

Debido a que los marcos legales e institucionales, así como también las encuestas financieras de hogares son heterogéneas entre países, se utilizan datos de los hogares de la economía chilena como un punto de partida en esta materia.

Hallazgos

La probabilidad de que un individuo elija pagar un monto menor que el total de facturación de sus tarjetas de crédito es afectada por variables proxy asociadas al control conductual percibido. La condición de ser jefe de hogar, ser más joven, la percepción de una alta o excesiva carga financiera de la deuda, y enfrentar situaciones desfavorables e inesperadas que desvían del presupuesto, entre otras, son relevantes para las decisiones de pago.

Originalidad

La novedad de este artículo es que su enfoque difiere del enfoque tradicional de la racionalidad económica en relación a las tarjetas de crédito. Los resultados son relevantes para los hacedores de política y reguladores financieros debido a sus implicancias para las finanzas conductuales de los hogares y sus medios de pago.

Details

Academia Revista Latinoamericana de Administración, vol. 37 no. 1
Type: Research Article
ISSN: 1012-8255

Keywords

Article
Publication date: 22 February 2024

Fuzhong Chen, Guohai Jiang and Mengyi Gu

Under the background of low consumer financial knowledge and accumulated credit card liabilities, this study investigates the relationship between financial knowledge and…

Abstract

Purpose

Under the background of low consumer financial knowledge and accumulated credit card liabilities, this study investigates the relationship between financial knowledge and responsible credit card behavior using data from the 2019 China Household Finance Survey (CHFS). From the perspective of consumer economic well-being, this study defines accruing credit card debt to buy houses and cars when loans with lower interest rates are available as irresponsible credit card behavior.

Design/methodology/approach

This study uses probit regressions to examine the association between financial knowledge and responsible credit card behavior because the dependent variable is a dummy variable. To alleviate endogeneity problems, this study uses instrument variables and Heckman’s two-step estimation. Furthermore, to explore the potential mediators in this process, this study follows the stepwise regression method. Finally, this study introduces interaction terms to examine whether this association differs in different groups.

Findings

The results indicate that financial knowledge is conducive to increasing the probability of responsible credit card behavior. Mediating analyses reveal that the roles of financial knowledge occur by increasing the degree of concern for financial and economic information and the propensity to plan. Moderating analyses show that the effects of financial knowledge on responsible credit card behavior are stronger among risk-averse consumers and in regions with favorable digital access.

Originality/value

This study measures responsible credit card behavior from the perspective of the consumer’s well-being, which enriches practical implications for consumer finance. Furthermore, this study explores the potential mediators influencing the process of financial knowledge that affects responsible credit card behavior and identifies moderators to conduct heterogeneous analyses, which helps comprehensively understand the nexus between financial knowledge and credit card behavior. By achieving these contributions, this study helps to curb the adverse effects of irresponsible credit card behavior on consumers’ well-being and the economic system and helps policymakers promote financial knowledge to fully prevent irresponsible credit card behavior.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 19 June 2023

Kirti Goyal, Satish Kumar and Arvid Hoffmann

Prior work expresses concern about young people's rising debt and lack of financial preparedness. This study focuses on how financial socialization and psychological…

1018

Abstract

Purpose

Prior work expresses concern about young people's rising debt and lack of financial preparedness. This study focuses on how financial socialization and psychological characteristics affect the personal financial management behavior (PFMB) of young professionals in India. The authors examine both the direct effect of these factors and the indirect effects through financial literacy and aforementioned psychological characteristics as mediators.

Design/methodology/approach

The authors develop a conceptual framework based on the extant literature and empirically test its hypotheses employing partial least squares structural equation modelling (PLS-SEM).

Findings

Attitude towards money, financial self-efficacy, financial risk tolerance, financial socialization through parental direct teaching and peers, and media are all positively associated with young professionals' PFMB, whereas external locus of control and procrastination are negatively associated with their PFMB. Almost all psychological characteristics partially mediate the association between financial socialization and PFMB. Finally, financial literacy plays a partially mediating role in the association between procrastination and PFMB as well as between financial socialization and PFMB.

Practical implications

This study helps regulators and policymakers understand PFMB among young professionals. Interventions should build on the positive role of financial socialization, cultivating a good attitude towards money and financial self-efficacy, and reducing reliance on an external locus of control and procrastination. This study also helps policymakers and financial educators develop societally beneficial personal finance programs.

Originality/value

This research investigates social, psychological and cognitive characteristics in a comprehensive framework to further the authors’ understanding of the topic of PFMB.

Details

International Journal of Bank Marketing, vol. 41 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 22 November 2023

Charles Ackah, Gertrude Dzifa Torvikey, Faustina Obeng Adomaa and Kofi Takyi Asante

The marginalisation of female entrepreneurs in accessing credit is well documented. Yet, how female entrepreneurs navigate through the marginalisation to gain funding is…

Abstract

Purpose

The marginalisation of female entrepreneurs in accessing credit is well documented. Yet, how female entrepreneurs navigate through the marginalisation to gain funding is under-explored.

Design/methodology/approach

The authors address this gap using qualitative data from 30 female entrepreneurs in three neighbourhoods with varying socio-economic characteristics in Ghana's capital, Accra.

Findings

The authors find a marked aversion to bank loans among respondents. Consequently, they nurtured trust in their social circles in order to facilitate access to informal credit from internal (e.g. family and friends) and external (e.g. trade credit, associations and religious organisations) sources. This aversion to loans from formal financial institutions (FFIs) had a socio-cultural aspect, including cumbersome application procedures, a deep-rooted fear of the social consequences of defaulting and religious prohibition against interest payment for Islamic traders.

Social implications

This paper shows that providing formal access to credit is not enough to support women's entrepreneurship if the socio-cultural factors inhibiting women's access to credit from FFIs are not addressed.

Originality/value

The findings suggest that trust is an important factor that bridges the gap in female entrepreneurs' access to funding given their heavy reliance on informal sources of funding.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-02-2023-0090

Details

International Journal of Social Economics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 17 November 2023

Nik Hadiyan Nik Azman, Abdul Hadi Zulkafli, Tajul Ariffin Masron and Abdul Rahman Abdul Majid

Financial illiteracy could pose a significant challenge to micro-entrepreneurs. There is a pressing need to foster financial literacy;, therefore, the purpose of this study is to…

Abstract

Purpose

Financial illiteracy could pose a significant challenge to micro-entrepreneurs. There is a pressing need to foster financial literacy;, therefore, the purpose of this study is to examine particularly how Islamic financial literacy may enhance their businesses toward achieving financial sustainability.

Design/methodology/approach

This study uses quantitative methods. Three hundred (300) questionnaires were distributed to micro-entrepreneurs in three states in Malaysia, namely, Kedah, Kelantan and Terengganu. This study used the partial least squares (PLS) analysis using the SmartPLS 3.2.

Findings

The study found that the most robust Islamic financial literacy factors are financial behavior, followed by financial knowledge and financial attitude .The outcome of Islamic financial literacy, which is financial sustainability, also demonstrates a positive and significant relationship.

Social implications

All variables show a positive and significant relationship toward financial sustainability. Stated differently, micro-entrepreneurs are aware that understanding the basic concepts of Islamic finance may help them achieve long-term financial sustainability

Originality/value

This study incorporates Islamic financial concepts into financial literacy while also assessing demographic aspects like years of business operation and education as moderators, which were not considered by previous studies.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

1 – 10 of over 2000