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Article
Publication date: 1 June 2021

Haidong Zhao and Lini Zhang

The purpose of this study was to investigate how financial literacy and investment experience impact cryptocurrency investment behavior and explore which factor is more…

Abstract

Purpose

The purpose of this study was to investigate how financial literacy and investment experience impact cryptocurrency investment behavior and explore which factor is more influential in cryptocurrency investment.

Design/methodology/approach

Using a sample of US individual investors from the 2018 National Financial Capability Study Investor Survey, a three-step hierarchical logistic regression was conducted following a model-comparison approach. In addition, a mediation analysis was conducted using the Karlson−Holm−Breen (KHB) method to further explore the mediating effect of investment experience between financial literacy and cryptocurrency investment.

Findings

This study found that while both financial literacy and investment experience were positively associated with investing in cryptocurrencies, investment experience was more influential in cryptocurrency investment. The findings also demonstrated that investment experience, especially risky asset holding, had a significant mediating effect between subjective financial knowledge and cryptocurrency investment behavior.

Practical implications

The findings of this study offer insight to researchers by providing a deeper understanding of the determinants of cryptocurrency investment in the United States. This study also provides detailed implications for financial institutions, financial professionals and policymakers to guide rational cryptocurrency investment behavior.

Originality/value

This study is one of the initial attempts to explore the determinant factors in cryptocurrency investment, an area that has rarely been studied in the literature.

Details

International Journal of Bank Marketing, vol. 39 no. 7
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 16 January 2019

Kibum Kwon

The purpose of this paper is to examine the relationship between training and development investment and financial performance over time. Human capital literature suggests…

Abstract

Purpose

The purpose of this paper is to examine the relationship between training and development investment and financial performance over time. Human capital literature suggests that training and development investment may not immediately affect financial performance but may instead create effects that are realized over time. However, most existing cross-sectional research explores the influence of training and development investment on performance while overlooking training and development investment’s long-term effects.

Design/methodology/approach

This study focuses on the recovery period following the Great Recession circa 2008 in the South Korean business context. Longitudinal data from 312 firms, including four distinct waves, were used. Latent growth modeling was used to help identify a pattern of reciprocal relationships between training and development investment and financial performance over time.

Findings

The results indicate that even though growth in training and development investment is stable over time, there are significant between-firm differences in training and development investment trajectories over time. Prior financial performance was shown to be positively related to higher levels of training and development investment, but it was not related to growth in training and development investment. The initial level of training and development investment did not predict subsequent profit, but growth in training and development investment was positively related to future financial performance.

Originality/value

This study suggests that as an organization’s training and development investment increases over time, a delayed effect on financial performance may emerge because of this accumulated investment. Ultimately, the results highlight the importance of having a stock of human capital, rather than concentrating upon momentary flows that yield immediate effects.

Details

International Journal of Manpower, vol. 40 no. 6
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

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Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 16 March 2012

Shalini Kalra Sahi, Nand Dhameja and Ashok Pratap Arora

The purpose of this paper is to illustrate the use of a post hoc predictive segmentation procedure to find out the variables that are the most important predictors of…

Abstract

Purpose

The purpose of this paper is to illustrate the use of a post hoc predictive segmentation procedure to find out the variables that are the most important predictors of investor's preference for specific financial investment products.

Design/methodology/approach

The study considers various demographic, socio‐economic and psychographic variables for the purpose of understanding the investor's preferences. Using a sample of individual investors (n=377), a classification and regression tree (CART) methodology was used to determine whether psychographic variables were better predictors than demographic and socio‐economic variables for understanding an individual investor's preference for the investment alternatives.

Findings

The results showed that psychographic variables emerged as the most important predictors in the case of investment products with greater degree of risk, and the demographic and socio‐economic variables emerged as the most important for the investment instruments with lesser degree of risk. However, when the sample was divided based on occupation profile (government and non‐government), for both the fixed returns based instruments and the non‐fixed instruments, psychographic variables emerged as the most important predictors.

Practical implications

These results show the need for financial service providers to consider the psychographic variables along with demographic and socio‐economic variables, so as to better understand and advise the financial consumers. This would enable the financial service institutions to target their audience more sharply, so as to develop appropriate marketing strategies and further build the investor's trust.

Originality/value

This paper is a first of its kind to empirically identify the most important variable that determines the financial consumer's preference for investment products in India, using CART technique. This study contributes to furthering the understanding of investor behavior.

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Article
Publication date: 1 November 2021

Pendo Shukrani Kasoga

The purpose of this research is to examine the effect of heuristic biases on investment decisions through multiple mediation mechanisms of risk tolerance and financial

Abstract

Purpose

The purpose of this research is to examine the effect of heuristic biases on investment decisions through multiple mediation mechanisms of risk tolerance and financial literacy in the Tanzanian stock market.

Design/methodology/approach

A sample of 316 individual investors in the Tanzanian stock market was obtained through questionnaires. The data were analyzed using structural equation modeling (SEM).

Findings

The findings show that financial literacy mediates insignificantly the effects of overconfidence, availability, anchoring and representativeness heuristics on investment decisions. Further, financial literacy does not influence the effect of risk tolerance and investment decisions. Risk tolerance is confirmed as a positive mediator of overconfidence, availability, anchoring and representativeness heuristics in investment decisions. Also, the study shows that overconfidence exerts a stronger influence on investment decisions, followed by availability, representativeness, risk tolerance, anchoring and financial literacy.

Research limitations/implications

The study deals with real investors. Therefore, it uses fewer items to measure the constructs in order to avoid respondent bias. Further research could examine the effects of heuristic biases on investment decisions by adding or modifying the items of particular constructs and studying institutional investors.

Practical implications

The findings can help individual investors to analyze and evaluate their behavior toward stock selection. Securities institutions can use this research to understand investors' behavior, evaluate future market trends and provide advice to the investors.

Originality/value

Previous studies have examined the impact of heuristics on the investment decisions of individual investors. The unique empirical analysis developed in this paper is that it examines the multiple mediation mechanisms of risk tolerance and financial literacy with respect to heuristic biases and investment decisions in the Tanzanian stock market.

Details

Journal of Money and Business, vol. 1 no. 2
Type: Research Article
ISSN: 2634-2596

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Article
Publication date: 14 September 2021

Lu Fan

The purpose of this study is to examine investors' internal characteristics, including investment literacy, risk tolerance and familiarity with mobile financial services…

Abstract

Purpose

The purpose of this study is to examine investors' internal characteristics, including investment literacy, risk tolerance and familiarity with mobile financial services, as antecedents of mobile investment technology adoption among American investors.

Design/methodology/approach

Using the 2018 National Financial Capability Study and its supplemental Investor Survey, this study examined antecedents, including investors' internal characteristics, in relation to mobile investment technology adoption. Nested logistic regression analyses were performed for adopting mobile apps for investment decisions and for investment trading.

Findings

This study found that objective and subjective investment knowledge, experience using mobile banking for payments and money transfers, and certain ownerships of investment vehicles (such as whole-life insurance policies and ETFs) were significant determinants of mobile investment decision-making. On the other hand, subjective investment literacy, risk tolerance, familiarity with mobile financial services, and portfolio value, as well as certain types of investment vehicles were significantly associated with mobile investment trading.

Originality/value

This study is among the first to examine investors' investment literacy, risk tolerance and familiarity with mobile financial services as investors' internal characteristics in relation to mobile investment technology adoption. The diffusion of innovations theory and related concepts provide theoretical support for this study. The findings provide new insights into mobile investing as an emerging FinTech subject and provide implications for practitioners and FinTech developers, as well as contribute to the literature of mobile investment service adoption among retail investors.

Details

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

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Article
Publication date: 6 October 2021

Rupali Misra, Puneeta Goel and Sumita Srivastava

Even after appreciating multi-faceted merits of retail participation in stock markets and extensive efforts by policymakers and financial service industry to increase it…

Abstract

Purpose

Even after appreciating multi-faceted merits of retail participation in stock markets and extensive efforts by policymakers and financial service industry to increase it, the present low retail participation in Indian stock markets is cause of grave concern. The purpose of this paper is to identify plausible drivers and deterrents of prospective and current household individuals through a multi-stage qualitative enquiry.

Design/methodology/approach

Two qualitative studies are conducted. In Study 1, scholarship of stakeholders is engaged through participative diamond model to propose behavioural classification of retail investors based on two-parameter framework. In Study 2, behavioural substructures of retail investors that drive or deter investment intentions and actions are identified through in-depth interviews.

Findings

Financial self-efficacy, past experience (own or peer group), financial eco-system, operational literacy, higher charges by financial experts and low liquidity in the hands of the investors are some key factors that influence investment intension and action of individual investors. Though digital platforms have helped to overcome hurdles faced by an investor but its availability, awareness and ease of use still remain a concern.

Practical implications

The inductive findings of this study uncover some important take-aways for the financial service industry – improve operational literacy, digital awareness, ease of use and incorporate risk assessments in client portfolios – and for the policymakers – improve investment eco-system through digital availability, financial literacy workshops focussed on operations.

Originality/value

To the best of the authors’ knowledge, this study is one of the initial attempts to adopt a multi-stage qualitative enquiry to propose behavioural classification of retail investors and uncover reasons that drive or deter individual investors’ intentions and actions in the context of Indian stock market. Moreover, this study provides necessary impetus to analyse and improve operational literacy (instead of financial literacy) and financial eco-system for higher retail participation.

Details

Qualitative Research in Financial Markets, vol. 13 no. 5
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 23 June 2021

Niharika Sinha and Swati Shastri

This paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.

Abstract

Purpose

This paper empirically examines the impact of financial development on domestic investment in India for the period 1989–2017.

Design/methodology/approach

This study employs the autoregressive distributed lag (ARDL) bounds testing approach to co-integration to test the long-run relationship between financial development and domestic investment. To test the direction of causality, Toda–Yamamoto causality test and vector error correction model (VECM) Granger causality/Block Exogeneity Wald test have been employed. Investment has been measured by Gross Capital Formation. To capture various aspects of financial development in India, eight alternative indicators (both bank based and market based) have been used. With the help selected indicators, a composite index (FINDEX) of financial development has been constructed using principal component analysis (PCA).

Findings

The estimated result finds evidence in favour of positive, short-run and long-run impact of financial development on investment in the Indian economy. Both bank-based and market-based indicators are found to significantly affect the level of investment. The significant effect of efficiency-based financial development indicators (both bank based and market based) upon domestic investment implies that there is a need to implement policies that ensure the efficiency of financial intermediation.

Originality/value

To the best of authors' knowledge, not much research has been done to explore the relationship between financial development and domestic investment, especially in the case of Indian economy. This study also tries to find the impact of bank-based and market-based financial development indicators upon domestic investment to explore banks vs market issue.

Details

South Asian Journal of Business Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-628X

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Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

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Book part
Publication date: 1 March 2016

Carolina Herrera-Cano and Maria Alejandra Gonzalez-Perez

The purpose of this study is to show how socially responsible investment (SRI) could represent a powerful tool (trust recovering in political and economic institutions) in…

Abstract

Purpose

The purpose of this study is to show how socially responsible investment (SRI) could represent a powerful tool (trust recovering in political and economic institutions) in the case of failure or stagnation of economic and financial growth. The purpose of this chapter is to evaluate the current status of SRI in the context of the recent financial and economic crises. The main objective of this analysis is to consider the different benefits and challenges that this type of investment transactions bring into the international economy, and how SRI entrance could represent a major benefit not only for investors a different approach to corporate sustainability but as an important possibility in times of global economic and political crisis.

Methodology/approach

By analysing the literature about SRI, it has been developed a discussion regarding its benefits and obstacles in today’s financial scenario. By evaluating the performance of SRI in the context of the global financial crisis and the important opportunities regarding development, we would like to present the SRI as an important tool in today’s Post 2015 development agenda.

Findings

After revising the existent literature, it has been found that there are two important discussions in the field of SRI. The first one is related with the financial performance of SRI in contrast with the conventional investment funds while the second one is related with important considerations about the SRI in the context of the global financial crisis. After considering the arguments from the different authors, we address some conclusions regarding the importance of SRI in nowadays sustainable development discussion.

Practical implications

Due to failure in the traditional modus operandi of financial institutions and the recent global crises, investors, corporate executives and governments are increasingly paying more attention on the social, environmental and ethical behaviour of individual managers, shareholders and institutional investors. Therefore, it is being observed a shift and maturing process in SRI from an exclusive practice of few and specialised niche investment funds with minor financial implications and limited economic importance, to mainstream adopted by a growing number of institutional investors at the international level. This shift may influence companies and managers to adopt universal values and to assume a committed and strategic CSR agenda to respond to markets and societal expectations, in order to have guilt-free and sustainable investment and sustainable financial markets.

Originality/value

Within the context of the Post 2015 development agenda, the role of business and the private sector has become crucial for funding the new sustainable development goals (SDGs). This chapter not only discussed the relationship between SRI as an alternative to overcome financial crises and lack of sustainability in investment, but it does also conceptually demonstrates the potential of SRI to achieve the funding of the SDGs.

Details

Lessons from the Great Recession: At the Crossroads of Sustainability and Recovery
Type: Book
ISBN: 978-1-78560-743-1

Keywords

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