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Starting in the 1980s, financial liberalization and technological developments have enabled individual investors to participate in financial markets and carry out easy transactions. With these developments, academics began to wonder how the individual investors decide to invest and what factors affect these decisions.

According to traditional finance theory, it is suggested that markets are efficient and investors show rational behaviors in their financial purchasing decisions. However, in many studies conducted in recent years, it was determined that investors included emotional elements as well as rational elements in their decision-making process and therefore exhibited irrational behaviors by believing rumors instead of real information. It is thought that many factors such as personal characteristics, psychological factors, demographic and socio-economic factors play a role in the behavior of investors in purchasing a financial product.

In this study, the importance of herd behavior, which is one of the psychological factors that play a very important role in financial markets, on financial product purchasing process is examined in the light of the behavioral finance theory. It is thought that information included in the study will be useful for researchers who want to study herd behavior and for those who are interested in the subject.

Introduction – Markowitz (1952) argues that individuals act rationally in their financial decisions. In contrast, Kahneman and Tversky (1979) claim that the psychological characteristics of people significantly affect financial decisions. In making these decisions, factors such as age, gender, and educational status may have an impact.

Purpose – The purpose of this study is to determine whether financial literacy has an impact on individuals’ cognitive biases related to financial investments.

Methodology – A sample of 444 individuals were surveyed.

Findings – In the results of study (1) it was determined that financial literacy leads to differences in cognitive biases; and (2) cognitive biases of individuals who do not receive finance education are different from individuals who receive finance education and professionals in the business world. The findings indicate that the increase in the level of financial literacy of individuals will reduce the cognitive biases and heuristics, and therefore will have a positive effect on the investor behavior in financial markets.

The authors believe the COVID-19 pandemic has an impact on supply and demand. The potential decline in real sector performance leads to lower expectations of securities performance. The uncertainty of future performance can change investor behaviour. This study tried to gain insight into stock investor behaviour during the COVID-19 pandemic. The results showed that the majority of the investor realized and believed the pandemic would affect the stock market performance. Hence, they did not show herding behaviour and were very confident during the COVID-19 pandemic. The survey also indicates that investors tend to avoid risk rather than take the opportunity to buy at a lower price. Moreover, investors believe that the COVID-19 vaccine will soon be found, and the economy will return to normal. Government and self-regulated organizations (SRO) are responsible for making effective policies to convince the investors about the future prospect.

Standard financial risk management practices proved unable to provide an adequate understanding and a timely warning of the financial crisis. In particular, the theoretical foundations of risk management and the statistical calibration of risk models are called into question. Policy makers and practitioners respond by looking for new analytical approaches and tools to identify and address new sources of financial risk. Financial markets satisfy reasonable criteria of being considered complex adaptive systems, characterized by complex financial instruments and complex interactions among market actors. Policy makers and practitioners need to take both a micro and macro view of financial risk, identify proper transparency requirements on complex instruments, develop dynamic models of information generation that best approximate observed financial outcomes, and identify and address the causes and consequences of systemic risk. Complexity analysis can make a useful contribution. However, the methodological suitability of complexity theory for financial systems and by extension for risk management is still debatable. Alternative models drawn from the natural sciences and evolutionary theory are proposed.

This research focuses on the financial literacy level, stock participation, and financial behavior among millennials in Indonesia.

Logit regression analysis is performed to analyze the relationship among tested variables. The weighted percentage analysis is also used to portray a response in relation to the sample of respondents. Such an analysis is widely used in Indonesia.

Findings suggest that for basic and advanced financial literacy level topics, millennials with higher education level and profession related to economy are the ones who have high basic financial literacy level. However, as respondents become older and/or get married, the basic financial literacy level tends to decrease. When the questions are advanced, the education level is statistically significant. If they have more available money to spend than others, then they tend to have a higher advanced financial literacy level. However, the advanced financial literacy level of female respondents who are older and/or have children tends to decrease. Subsequently, the relationship between financial literacy level and stock market participation is evident when millennials have a high basic and/or advanced financial literacy level, suggesting that they tend to participate in the stock market. Overconfident millennials or those who focus on learning economics also likely participate in the stock market.

Introduction: In this era, financial literacy is conceptualised diversely in the literature. However, as a general term, ‘Financial Literacy’ can be said to mean acting in line with one’s material realities whilst using or managing money. Increasing the financial literacy rate amongst students in Kosovo is paramount since it will prepare and support them in making informed investment decisions and in managing their financial situations.

Aim: The study aims to determine the financial literacy levels of students in Kosovo and to determine the relationship between investment decisions and the Covid-19 pandemic.

Method: The dataset examines four factors (i.e. financial literacy, self-control, peer influence and COVID-19) that influence investment behaviour amongst young students in Kosovo. A total of 228 students from Kosovo participated in the study, and the survey measured their financial literacy, investment knowledge, and the COVID-19 impact on their investment decisions using the random sampling technique. The reflective measurement was made using the Partial Least Squares Structural Equation Model (PLS-SEM) on the data scanned from the survey (N = 228). The measurement includes the evaluation of external loading, internal reliability, and convergent reliability. The final equation model was evaluated and estimated using the Smart-PLS v.3.3.3 program.

Findings: The research findings are useful for companies seeking potential investors from generation Y. In addition to that, the results of the research show that students from Kosovo who are more financially literate are more skilled and make more well-informed decisions when investing. In this study, it was determined that the COVID-19 pandemic did not have a negative effect on the investment decisions of students from Kosovo.

Purpose: This chapter focuses on the enterprise’s ethics and social responsibility, which are interdependently resulting in an enterprise’s credibility and better performance. The authors provide a comprehensive tool that can help enterprises and humankind to find a better way toward new economic and social conditions, thus society’s transformation, beginning with the enterprise-level innovation of decisions that originate from the (key) stakeholders’ personal level innovation of decisions. The purpose is to show a possible path toward requisitely holistic enterprises’ governance, management and practice.

Method: The authors use a qualitative methodological approach, based on three relations (the law of requisite holism, the law of hierarchy of succession and interdependence, and the law of entropy) and three elements (10 guidelines defining the subjective starting points and objectives, and 10 guidelines on assuring the agreed policy to survive in latter steps of working process) of Dialectical systems theory. This chapter methodologically also follows the ethics of interdependence. Based on the research, the authors propose to use the supplemented credibility strategy as a possible methodological way of introducing enterprise ethics into practice.

Findings: The authors introduce a supplemented model of the strategy of an enterprise’s credibility. The authors propose using this new model to develop an enterprise’s social responsibility and ethics in a broader sense. The authors focus is on financial institutions’ governance and credibility. The main finding of this chapter is that strong regulation of the financial sector contributes positively to all four dimensions in the strategy of an enterprise’s credibility – if it is requisitely holistic rather than one-sided and short-term.

Originality and Significance of Findings: The strategy of an enterprise’s credibility could be used as a practical implementation tool for (key) stakeholders. They can use the strategy of an enterprise’s credibility to innovate its behavior toward appropriate holistic behavior and sustainable development stimulating. This new tool can lead enterprises toward (more) social responsibility, enterprise ethics and credibility. In applying this theory to financial institutions, the authors find that such financial regulation (and supervision) significantly strengthens multiple dimensions of enterprise credibility. In this regard, the authors find it favorable and encourage such regulation in all enterprises engaged in financial services, including non-bank institutions. Besides, to add to more comprehensive social benefits, the authors find it favorable to encourage similar development in other economic sectors, not the opposite, deregulation.

Educating audiences towards positive transformational change and targeted towards the improvement of quality of life in the field of strategic communication is almost a fairy tale. The controversy surrounding the Croatian pension fund system and its reform, low pensions, the negative demographic trends and low levels of financial and retirement literacy has put pension funds in a constant position of dealing with crisis communication strategies. At the same time, strategic communication in the industry is very traditional and is usually unnoticed. Taking a step back from a traditional goal of customer acquisitions, Croatian pension funds have pooled their efforts within the Association of Pension Funds and Pension Fund Insurance Companies in order to act as a unified group when dealing with joint interest. Recognizing the need of society to raise awareness of personal engagement in the process of retirement savings, they have decided to use education as a tool of strategic communication. This chapter has the purpose of showing how purposeful content-based valuable information can be created with the aim of influencing attitudes and behaviours in the field of personal and pension savings. During the project a quantitative study was conducted in order to investigate the effectiveness of the education on the attitudes and knowledge related to pension fund savings. The results of the quasi experiment indicate that the education has increased respondents' knowledge and positive attitudes towards retirement savings.