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21 – 30 of over 146000Radnyi Godase, Jyothi P and M. Lalitha Supriya
The study aims to explore the role of media in enhancing financial knowledge, financial self-efficacy, and financial planning propensity among working adults in India.
Abstract
Purpose
The study aims to explore the role of media in enhancing financial knowledge, financial self-efficacy, and financial planning propensity among working adults in India.
Design/methodology/approach
Primary survey-based data (n = 542) were analyzed using covariance based-structural equation modeling.
Findings
Media has a positive impact on financial knowledge. Financial knowledge positively mediates the relationship between media usage and financial self-efficacy and financial planning propensity. Also, financial knowledge and financial self-efficacy positively mediate the relationship between media usage and financial planning propensity.
Originality/value
The role of media as a significant agent of consumer socialization is an under-researched area. The authors contribute to the existing literature by demonstrating the role of media in improving financial knowledge and financial self-efficacy to promote financial planning propensity among working adults.
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Ana Junça Silva and Raquel Dias
Although overall well-being is a well-studied phenomenon, financial well-being only recently has attracted scholars’ attention. Accordingly, this study aimed to understand the…
Abstract
Purpose
Although overall well-being is a well-studied phenomenon, financial well-being only recently has attracted scholars’ attention. Accordingly, this study aimed to understand the relationship between financial well-being, its predictors (financial status, financial behaviour, financial knowledge and financial attitudes) and overall well-being.
Design/methodology/approach
The authors collected data from 262 working adults.
Findings
The results showed that only financial status was positively related to financial well-being and the latter was positively related to overall well-being. It was also found that financial well-being mediated the relationship between financial status and overall well-being. In sum, these results showed a multidisciplinary concept of overall well-being and that individuals tend to prioritize financial security over the other components.
Research limitations/implications
The cross-sectional nature of the data is a limitation.
Practical implications
Practically speaking, this research is relevant because it highlights the evidence of financial status as an important influence on financial well-being, as well as the role of household income in individuals’ financial satisfaction.
Originality/value
The study addresses a call for research on the relationship between financial well-being, its main predictors and how these contribute to explain overall well-being.
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Sara Jonsson, Inga-Lill Söderberg and Mats Wilhelmsson
The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias…
Abstract
Purpose
The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Specifically, the authors focus on individual characteristics explaining the investors’ propensity to sell shares in a poorly performing mutual fund.
Design/methodology/approach
The study relies on survey data collected from 1,564 Swedish households in 2013. The authors test the hypotheses considering three different portfolio compositions and portfolio performances. Each composition corresponds to a dependent variable and a separate model which are estimated using ordinal logistic regression.
Findings
The authors find that different forms of financial literacy affect attenuation of the disposition effect. Specifically, the authors find that knowledge about mutual funds and knowledge about current market conditions affect the attenuation of the disposition effect, whereas the authors find no support for the effect of “technical financial knowledge” (e.g. the ability to calculate compound interest rates). The authors also find no support for the effects of risk attitude and saving motives on the attenuation of the disposition bias.
Originality/value
The findings suggest a need for a more fine-grained conceptualization of the financial literacy concept and its effect on investors’ disposition bias. Since an important implication of the findings is that financial literacy could potentially help people overcome behavioral bias, the study provides insights for policymakers as well as into the discussion on the design of consumer education programs.
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Long She, Ratneswary Rasiah, Jason James Turner, Vinitha Guptan and Hamid Sharif Nia
This study aimed to assess the impact of psychological beliefs (subjective financial knowledge, financial attitude and locus of control) on financial well-being, as well as the…
Abstract
Purpose
This study aimed to assess the impact of psychological beliefs (subjective financial knowledge, financial attitude and locus of control) on financial well-being, as well as the mediating role of financial behaviour in the relationship between psychological beliefs and financial well-being among working adults in Malaysia.
Design/methodology/approach
A survey-based questionnaire was used to elicit information from a total of 500 working adults from Malaysia. Partial least squares structural equation modelling (PLS-SEM) was used to assess the measurement model and the proposed mediation model.
Findings
The results showed that subjective financial knowledge, financial attitude and locus of control have a positive impact on both financial behaviour and financial well-being. The results also showed that financial behaviour mediates the relationships between financial attitude and financial well-being, as well as between locus of control and financial well-being.
Originality/value
Given the anticipated global economic recession, a better understanding of how individuals manage their finances becomes ever more crucial. The findings from this research inform policymakers, practitioners and academics on the importance of psychological factors and financial management practices on financial well-being, addressing an identified gap in the current literature.
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Bruce A. Huhmann and Shaun McQuitty
The purpose of this article is to develop a theoretical explanation – financial numeracy – for consumer proficiency with financial services. With sufficient financial numeracy…
Abstract
Purpose
The purpose of this article is to develop a theoretical explanation – financial numeracy – for consumer proficiency with financial services. With sufficient financial numeracy, consumers benefit fully from financial services and make competent choices in regard to financial management.
Design/methodology/approach
The article builds theory by combining consumer cognitive capacity and customer knowledge theories with findings from prior studies of consumer difficulties with financial services to introduce a comprehensive model of the antecedents and consequences of financial numeracy with testable propositions for many psychographic and cultural influences and moderators.
Findings
Financial numeracy demands that consumers possess sufficient financial information processing capacity and ability as well as sufficient prior knowledge of financial concepts. Although partly a function of individual cognitive ability, it can be enhanced through appropriate experience with financial instruments and familiarity through personal financial materials when consumers are motivated to process them. Financial numeracy directly affects financial management outcomes related to borrowing, saving, and taxes. It indirectly affects higher‐order financial consequences, such as a consumer's credit score, interest rates charged on subsequent loans, net worth, likelihood of bankruptcy, and size of inheritance.
Originality/value
Consumers around the world are increasingly experiencing difficulties with financial services. To advance research in financial services marketing beyond documenting troublesome financial behaviours of consumers, this conceptual model provides insights to help increase consumer proficiency in comprehending and managing financial services based on knowledge about consumer information processing, learning, memory and the cultural and psychographic influences on these internal processes.
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Vera Intanie Dewi and Leo Indra Wardhana
This study investigates the relationship between financial literacy, that is, financial knowledge and financial skills, and market discipline, with financial behavior as the…
Abstract
Purpose
This study investigates the relationship between financial literacy, that is, financial knowledge and financial skills, and market discipline, with financial behavior as the mediating variable. The study uses data from Indonesian depositors in commercial banks to estimate the relationship between the variables.
Design/methodology/approach
This study applied an explanatory method with a quantitative approach by surveying 343 Indonesian commercial bank depositors, in both public and private banks. The responses were collected using the purposive sampling technique. This study applied structural equation modeling (SEM) using AMOS software to analyze the data and then to estimate the relationships between financial literacy and market discipline.
Findings
This study shows that financial knowledge, financial skills, and financial behavior can improve market discipline. This study also provides empirical evidence that financial behavior has a mediation effect on the relationship between financial skills and financial knowledge to the market discipline.
Research limitations/implications
The results show that all financial literacy latent variables have a significant positive effect on market discipline. Financial behavior has a mediation effect on the relationship of financial skills and financial knowledge with market discipline. Depositors with good knowledge of financial products and services, who are skillful in managing their money and who demonstrate good financial behavior can effectively discipline the market. They will punish imprudent banking by actions such as the withdrawal of their funds. Financial literacy significantly enhances market discipline.
Practical implications
This study provides recommendations for regulators, practitioners, academics, and depositors, that is, the actors in the financial industry, on the need to empower consumers with financial literacy, while also promoting market discipline to recognize the importance of these two aspects for the sustainability of financial stability.
Originality/value
This study provides empirical evidence for the market discipline literature, using a behavioral approach, namely, the action of withdrawal of funds. The study then estimates the relationship between financial literacy, that is, financial knowledge and financial skills, and market discipline, with financial behavior as the mediating variable.
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Mohammad G. Nejad and Katayon Javid
The purpose of this paper is to explore the relationship between consumers’ subjective and objective financial literacy (OFL) – the necessary knowledge and skills to make…
Abstract
Purpose
The purpose of this paper is to explore the relationship between consumers’ subjective and objective financial literacy (OFL) – the necessary knowledge and skills to make effective personal financial decisions – and their effects on opinion leadership and the use of retail financial services.
Design/methodology/approach
In total, 486 US participants were surveyed. The demographical profile of the sample roughly resembled that of the USA population.
Findings
On average, consumers with moderate levels of OFL report lower subjective financial literacy (SFL) compared to those with low or high levels of OFL. Moreover, while SFL and opinion leadership are positively correlated, consumers with moderate levels of OFL reported lower opinion leadership compared to those with high or low levels of OFL. The paper introduces financial literacy miscalibration as the discrepancy between consumers’ objective and SFL. Financially illiterate respondents who perceived themselves as financially knowledgeable reported high opinion leadership. Finally, a greater percentage of financially – literate consumers reported owning checking and savings accounts, using online and mobile banking for diverse purposes, and making fewer phone calls to customer services, compared to others.
Research limitations/implications
The paper integrates literature from financial literacy, consumer knowledge, and opinion leadership to explain these findings and to further enhance our theoretical and empirical understanding of objective vs SFL.
Practical implications
The discrepancies between objective and SFL may significantly influence consumers’ financial decisions and the degree to which they expose themselves to the pertinent risks. The paper discusses implications for public policy makers as well as marketing managers and researchers.
Originality/value
The study is the first to empirically explore the research questions following the conceptual development.
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Joshua C. Palmer, Yunhyung Chung, Youngkyun Park and Gang Wang
Drawing on broaden-and-build theory and promotion- and prevention-focus theory, the authors examined the role of positive and negative affectivity (PANA) on the riskiness of…
Abstract
Purpose
Drawing on broaden-and-build theory and promotion- and prevention-focus theory, the authors examined the role of positive and negative affectivity (PANA) on the riskiness of investment decisions. The authors also examined the mediating impact of financial knowledge network intensity (i.e. the level of communication with financially literate others in employees' social network) on the PANA—riskiness of investment decisions relationship.
Design/methodology/approach
Study 1 used a sample of undergraduate students and operationalized risk using a hypothetical investment scenario. Study 2 replicated and extended the Study 1 findings using employees and operationalized risk using their real-world investment allocations.
Findings
Both Studies 1 and 2 provided support for the negative direct relationship between NA and the riskiness of investment decisions. Study 2 found PA was marginally positively related to the riskiness of investment decisions. Financial knowledge network intensity mediated the relationship between NA and the riskiness of investment decisions in Study 2.
Research limitations/implications
The findings suggest that employees who see the world in a generally negative light tended to have weaker financial knowledge networks, and this may be one mechanism that explains why they make low-risk investments.
Practical implications
Financial knowledge networks can provide access to critical information regarding investment opportunities. Socialization training or social mixers can be used to help employees build and improve their financial knowledge networks.
Originality/value
The authors integrate the research on PANA, social networks, and investment decisions to illuminate the social network processes that explain how affectivity impacts the riskiness of retirement investment decisions.
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Philomina Araba Sam, Siaw Frimpong and Stephen Kendie
This study sought to examine the impact of financial knowledge, financial attitude, locus of control and income on financial behaviour.
Abstract
Purpose
This study sought to examine the impact of financial knowledge, financial attitude, locus of control and income on financial behaviour.
Design/methodology/approach
The study employed the reasoned action approach framework by Fishbein and Ajzen (2010), with formal sector workers in three districts of Ghana as the population. Questionnaires were used to collect data and analysed using partial least squares structural equation model (PLS-SEM).
Findings
The results of the study revealed that perceived financial knowledge, financial attitude and locus of control had a significant positive relationship with financial behaviour intention. The assertion that actual financial knowledge and income influence actual financial behaviour was not supported by the findings. However, income moderated significantly the intention–actual financial behaviour relationship.
Practical implications
The findings imply that having financial knowledge or earning a higher income in itself does not guarantee the good financial behaviour of people. It is recommended that financial education must focus on developing good financial attitudes and beliefs to enhance the needed behavioural change.
Originality/value
To the best of the researcher's knowledge, there is no study of financial behaviour that adopts the methodology and variables used in this research in Ghana.
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The study examines the antecedents of responsible financial management behavior among young adults in India and explores the role of financial risk tolerance as a moderating…
Abstract
Purpose
The study examines the antecedents of responsible financial management behavior among young adults in India and explores the role of financial risk tolerance as a moderating variable.
Design/methodology/approach
The sample includes young adults in the age group of 18–35. The analysis uses a two-step approach via standard partial least squares structural modeling (PLS-SEM) and ordinary least square (OLS) regression.
Findings
Structural modeling results show that financial attitude fully mediates the relationship between financial knowledge and responsible financial management behavior, and locus of control influences responsible financial management behavior. Financial risk tolerance moderates the relationship. Among demographic factors, age and occupation influence responsible financial management behavior.
Research limitations/implications
The financial knowledge used in the survey are based on self-reported responses. The future study can include participants from both developed and emerging countries to assess similarities and differences.
Practical implications
Despite the growing focus on improving financial literacy, there are growing concerns regarding responsible financial behavior. Since financial services is related to fiduciary responsibility, managers and policymakers need to ensure that financial knowledge results in improving financial attitude, which further leads to responsible financial behavior.
Originality/value
The present study from an emerging country will add value to the literature.
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