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Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

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Article
Publication date: 13 October 2021

David Diaz, José L. Ruiz and Pablo Tapia

In an era of increasing financial vulnerability, people are not saving enough to either fund their future pension benefits or having precautionary savings. The authors…

Abstract

Purpose

In an era of increasing financial vulnerability, people are not saving enough to either fund their future pension benefits or having precautionary savings. The authors propose that pension knowledge makes people increase their probability of having voluntary pension and banking savings.

Design/methodology/approach

The authors use the social protection survey in Chile, a unique set of panel data for affiliates in 2006 and 2009. First, the authors use clustering algorithms to find naturally occurring groupings in the level of pension knowledge. Second, the authors run a probit regression model for explaining the probability of having a voluntary pension and banking savings, using as determinants the level of pension knowledge and several control variables that are usually explored in the literature.

Findings

The authors find two clusters of pension knowledge in the Chilean pension system. In addition, the authors find that there is a positive correlation between high pension knowledge and good financial decision-making, as these people have voluntary retirement and banking savings.

Practical implications

As people who spend time planning accumulate more wealth, it is important to develop public policies that promote the advantages to know better about the benefits of having voluntary savings for the long-term horizon. Conscientious people are also more likely to have voluntary savings.

Social implications

Policy programs to increase to be responsible can have positive effects on society's welfare.

Originality/value

Up to the authors’ knowledge, this is the first study that connects clustering algorithms and pension knowledge.

Propósito

En una era de creciente vulnerabilidad financiera, las personas no están ahorrando lo suficiente para financiar sus futuras pensiones ni para tener ahorros precautorios. Proponemos que el conocimiento de las pensiones hace que las personas aumenten su probabilidad de tener ahorros voluntarios para pensiones y bancarios.

Metodología

Usamos la Encuesta de Protección Social en Chile, una base única de datos de panel para afiliados en 2006 y 2009. En primer lugar, usamos algoritmos de clustering para encontrar agrupaciones naturales en cuanto a nivel de conocimiento sobre pensiones. En segundo lugar, usamos un modelo de regresión probit para explicar la probabilidad de tener ahorros voluntarios para pensión y bancarios, utilizando como determinantes el nivel de conocimiento sobre pensiones y variables de control.

Resultados

Encontramos dos grupos de conocimiento sobre pensiones en el sistema de pensiones chileno. Además, encontramos que existe una correlación positiva entre un alto conocimiento de las pensiones y tener ahorros voluntarios.

Implicancias prácticas

A medida que las personas dedican tiempo a planificar acumulan más riqueza, por lo que es importante desarrollar políticas públicas que promuevan las ventajas para conocer mejor los beneficios de contar con ahorros voluntarios para un horizonte de largo plazo.

Implicancias sociales

Los programas de políticas para aumentar la responsabilidad pueden tener efectos positivos en el bienestar de la sociedad.

Originalidad

Este es el primer estudio que conecta algoritmos de agrupación en clústeres para el conocimiento de las pensiones y sus implicaciones en la toma de decisiones financieras.

Details

Academia Revista Latinoamericana de Administración, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1012-8255

Keywords

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Article
Publication date: 5 August 2019

Ahmed H. Al-Dmour, Masam Abood and Hani H. Al-Dmour

This study aims at investigating the extent of SysTrust’s framework (principles and criteria) as an internal control approach for assuring the reliability of accounting…

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Abstract

Purpose

This study aims at investigating the extent of SysTrust’s framework (principles and criteria) as an internal control approach for assuring the reliability of accounting information system (AIS) were being implemented in Jordanian business organizations.

Design/methodology/approach

The study is based on primary data collected through a structured questionnaire from 239 out of 328 shareholdings companies. The survey units were the shareholding companies in Jordan, and the single key respondents approach was adopted. The extents of SysTrust principles were also measured. Previously validated instruments were used where required. The data were analysed using t-test and ANOVA.

Findings

The results indicated that the extent of SysTrust being implemented could be considered to be moderate at this stage. This implies that there are some variations among business organizations in terms of their level of implementing of SysTrust principles and criteria. The results also showed that the extent of SysTrust principles being implemented was varied among business organizations based on their business sector. However, there were not found varied due to their size of business and a length of time in business (experience).

Research limitations/implications

This study is only conducted in Jordan as a developing country. Although Jordan is a valid indicator of prevalent factors in the wider MENA region and developing countries, the lack of external validity of this research means that any generalization of the research findings should be made with caution. Future research can be orientated to other national and cultural settings and compared with the results of this study.

Practical implications

The study provides evidence of the need for management to recognize the importance of the implementation of SysTrust principles and criteria as an internal control for assuring the reliability of AIS within their organizations and be aware which of these principles are appropriate to their size and industry sector.

Originality/value

The findings would be valuable for academic researchers, managers and professional accounting to acquire a better undemanding of the current status of the implementation of the SysTrust principles (i.e., availability, security, integrity processing, confidentiality, and privacy) as an internal control method for assuring the reliability of AIS by testing the phenomenon in Jordan as a developing country.

Details

International Journal of Accounting & Information Management, vol. 27 no. 3
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 15 October 2021

Emmanuel Sarpong-Kumankoma

This paper aims to investigate the impact of financial literacy on savings and retirement planning in Ghana.

Abstract

Purpose

This paper aims to investigate the impact of financial literacy on savings and retirement planning in Ghana.

Design/methodology/approach

The study uses primary data collected from a sample of formal sector workers and probit models, to assess how financial literacy affects retirement planning.

Findings

The empirical analysis of this study shows that most individuals lack knowledge of basic concepts of finance. This study finds that only about 27% of respondents were able to correctly answer three simple questions on inflation, interest compounding and risk diversification. Generally, the young, the old, women, low-income earners and the less educated perform worst on financial literacy measures. Also, financial literacy has a positive significant impact on the probability of saving for retirement.

Practical implications

The low level of financial literacy observed should be of concern to policymakers. Evidently, concrete measures are required to strengthen the knowledge of particularly those in the vulnerable groups such as the young, the old, women, low-income earners and the less educated, in order to enable them to prepare adequately for retirement.

Originality/value

The study contributes to the scant financial literacy and financial behavior literature in developing countries such as Ghana.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 6 August 2021

Aneeka Kanwal

This paper aims to present a simple behavioural explanation of the prohibition of speculation in Islamic finance.

Abstract

Purpose

This paper aims to present a simple behavioural explanation of the prohibition of speculation in Islamic finance.

Design/methodology/approach

This paper proposes a theoretical model that describes how investors from low income strata of the society may be prone to make sub-optimal decisions when they compare their outcome from a speculative trading activity to that of the counterparty to the trade and perceive inequity to exist.

Findings

When individuals from low income strata of the society compare their current situation with the average income of the society, they perceive themselves to be in a loss. This creates a loss frame within which they then evaluate all future outcomes. When such individuals invest in speculative trading activities and incur a loss, they compare their outcome from the trade to that of the counterparty to the trade. As speculative trades are a zero sum game, the counterparty makes an equivalent gain from the trade. Thus, the comparison leads to a perception of inequity. This perception of inequity is aggravated by the loss frame within which the investor is operating. The aggravated inequity aversion may then motivate the investor to make further sub-optimal decisions like repeated speculative trading activities. The Islamic prohibition on speculative trading activities may serve to protect low income investors from entering into such cycles of sub-optimal decisions.

Originality/value

This paper offers a unique explanation of why day trading and short selling may be prohibited in Islamic capital markets.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 27 May 2021

Nuno Silva

The study aims to show that ambiguity aversion exerts a non-negligible effect on the investors' decisions, especially due to the possibility of sharp declines in stock prices.

Abstract

Purpose

The study aims to show that ambiguity aversion exerts a non-negligible effect on the investors' decisions, especially due to the possibility of sharp declines in stock prices.

Design/methodology/approach

The vast majority of previous studies on life-cycle consumption and asset allocation assume that the equity premium is constant. This study evaluates the impact of rare disasters that shift the stock market to a low return state on investors' consumption and portfolio decisions. The author assumes that investors are averse to ambiguity relative to the current state of the economy and must incur a per period cost to participate in the stock market and solve their optimal consumption and asset allocation problem using dynamic programming.

Findings

The results show that most young investors choose not to invest in stocks because they have low accumulated wealth and the potential return from their stock market investments would not cover the participation costs. Furthermore, ambiguity-averse investors hold considerably fewer stocks throughout their lifetime than ambiguity-neutral ones. The fraction of wealth invested in stocks over the typical consumer's life is hump-shaped: it is low for a young individual, peaks at his early 30s and then decreases until his retirement age.

Originality/value

To the best of the author’s knowledge, this is the first study that assesses the impact of negative stock price jumps on the optimal portfolio of an ambiguity-averse investor.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

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Article
Publication date: 17 June 2021

Divya Aggarwal, Uday Damodaran, Pitabas Mohanty and D. Israel

This study examines individual ambiguity attitudes alone and in groups by leveraging the descriptive model of anchoring and adjustment on decision-making under ambiguity…

Abstract

Purpose

This study examines individual ambiguity attitudes alone and in groups by leveraging the descriptive model of anchoring and adjustment on decision-making under ambiguity. The study extends Ellsberg's probability ambiguity to outcome ambiguity and examines decisions made under both ambiguities, at different likelihood levels and under the domain of gains and losses.

Design/methodology/approach

The methodology selected for this study is a two-stage within-subject lab experiment, with participants from different Indian universities. Each participant made 12 lottery decisions at the individual level and at individuals in the group level.

Findings

The results show that ambiguity attitudes are not universal in nature. Ambiguity seeking as a dominant choice was observed at both the individual level and at individual in the group level. However, the magnitude of ambiguity seeking or ambiguity aversion contingent upon the domain of gains and losses differed widely across the individual level and at individuals in the group level.

Research limitations/implications

The study enables to contribute toward giving a robust descriptive explanation for individual behavior in real-world applications of finance. It aims to provide direction for theoretical normative models to accommodate heterogeneity of ambiguity attitudes.

Originality/value

The study is novel as it examines a two-dimensional approach by representing ambiguity in probability and in outcomes. It also analyzes whether decisions under ambiguity vary when individuals make decisions alone and when they make it in groups.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 18 June 2021

Alexandre Asselineau and Gilles Grolleau

Labeling something as “impossible” can be performative and deprive businesses from promising ideas, by activating limiting mental models and self-fulfilling prophecies…

Abstract

Purpose

Labeling something as “impossible” can be performative and deprive businesses from promising ideas, by activating limiting mental models and self-fulfilling prophecies. Adopting an “everything may be(come) possible” thinking as the default option can lead businesses to discover unexpected and valuable directions and make the world a better place. This paper aims to propose practical insights to harness the power of “impossible” thinking such as considering impossibility as a current and temporary state, adopting an unconventional mindset and redirecting the reflection on what is needed to make the idea possible. Falling in love with any impossible target is obviously not without downsides.

Design/methodology/approach

This paper discusses conceptually how adopting an impossible thinking approach can help business to discover unexpected and valuable directions.

Findings

The authors caution managers on the inappropriate use of the “impossible” label that can be performative, activate a limiting mental model, lead to a self-fulfilling prophecy and deprive businesses from promising ideas. This paper proposes ways by which the power of impossible thinking can be harnessed to make a difference.

Research limitations/implications

Discarding impossible ideas seems perfectly justified from a logical or cultural viewpoint while constituting simultaneously a bad decision from a business viewpoint. The generalization of authors’ insight must be undertaken with caution, given that harnessing the power of impossible does not mean to fall in love with any impossible idea.

Practical implications

Learning to not neglect seemingly impossible options and sometimes to reveal them can lead to sustainable competitive advantages.

Social implications

While generating a competitive advantage for the concerned companies, implementing impossible ideas can also contribute to make the world a better place.

Originality/value

The authors identify some mechanisms that can make impossible thinking beneficial and profitable for companies. These insights can help managers to nurture an environment that facilitates the emergence of pathbreaking advances.

Details

Journal of Business Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0275-6668

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Abstract

Details

Circular Economy in Developed and Developing Countries: Perspective, Methods and Examples
Type: Book
ISBN: 978-1-78973-982-4

Keywords

Abstract

Details

Circular Economy in Developed and Developing Countries: Perspective, Methods and Examples
Type: Book
ISBN: 978-1-78973-982-4

Keywords

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