Search results

1 – 10 of over 2000
Click here to view access options
Article
Publication date: 29 December 2021

Patrícia de Oliveira Campos and Marconi Freitas da Costa

This study aims to further analyse the decision-making process of low-income consumer from an emerging market by verifying the influence of regulatory focus and construal…

Abstract

Purpose

This study aims to further analyse the decision-making process of low-income consumer from an emerging market by verifying the influence of regulatory focus and construal level theory on indebtedness.

Design/methodology/approach

An experimental study was carried out with a design 2 (regulatory focus: promotion vs prevention) × 2 (psychological distance: high vs low) between subjects, with 140 low-income consumers.

Findings

Our study points out that the propensity towards indebtedness of low-income consumer is higher in a distal psychological distance. We found that promotion and prevention groups have the same propensity to indebtedness. Moreover, we highlight that low-income consumers are prone to propensity to indebtedness due to taking decisions focused on the present with an abstract mindset.

Social implications

Financial awareness advertisements should focus on providing more concrete strategies in order to reduce decision-making complexity and provide ways to reduce competing situations that could deplete self-regulation resources. Also, public policy should organize educational programs to increase the low-income consumer's ability to deal with personal finances and reduce this task complexity. Finally, educational financial programs should also incorporate psychology professionals to teach mindfulness techniques applied to financial planning.

Originality/value

This study is the first to consider regulatory focus and construal level to explain low-income indebtedness. This paper provides a deeper analysis of the low-income consumers' decision process. Also, it supports and guides future academic and decision-making efforts.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Click here to view access options
Book part
Publication date: 23 September 2009

Rebecca Schaumberg and Francis J. Flynn

This chapter aims to clarify the distinction between feeling grateful and feeling indebted. Often overlooked and underappreciated, the differences that define these unique…

Abstract

This chapter aims to clarify the distinction between feeling grateful and feeling indebted. Often overlooked and underappreciated, the differences that define these unique affective experiences are critical to understanding the consequences of helping behavior. This chapter describes the psychological underpinnings of gratitude and indebtedness and outlines the ways in which previous research has conflated the two constructs. In addition, it puts forth a set of testable propositions that help distinguish the relative importance of gratitude and indebtedness in interpersonal relations. The implications of these ideas are discussed in the context of individual generosity, social exchange, and group dynamics.

Details

Altruism and Prosocial Behavior in Groups
Type: Book
ISBN: 978-1-84855-573-0

Click here to view access options
Article
Publication date: 29 June 2020

Farah Diba M.A. Abrantes-Braga and Tânia Veludo-de-Oliveira

This study aims to develop and test a parsimonious theoretical model of risky indebtedness behaviour, a facet of over-indebtedness that refers to the behavioural tendency…

Abstract

Purpose

This study aims to develop and test a parsimonious theoretical model of risky indebtedness behaviour, a facet of over-indebtedness that refers to the behavioural tendency of often assuming hazardous debt levels.

Design/methodology/approach

The authors administered an online survey to credit card owners (n = 1,288) in an emerging economy in which consumer credit is characterized by extremely high interest rates (i.e. Brazil). The authors used covariance-based structural equation modelling to analyse the data and test for mediation effects.

Findings

Individuals who inadvertently consider their credit limits a part of their current income or are typically anxious about money are prone to engage in impulsive buying and, consequently, risky indebtedness behaviour. By engaging in such indebtedness behaviour, individuals weaken their financial preparedness for emergencies, which potentially jeopardizes their overall financial well-being.

Research limitations/implications

As indebtedness is a highly sensitive issue, the self-report measures used may have produced social desirability bias.

Practical implications

This study discusses the responsibility of financial institutions to support consumers in building awareness on how to adequately use financial services and to provide credit access to high-risk consumers. Policymakers need to ensure that those in the private sector play fairly.

Originality/value

This study adds new knowledge about how destructive financial behaviours operate and impact marketing and consumers’ financial well-being. It theorizes about indebtedness by critically examining existing and newly developed concepts in the financial services marketing literature.

Click here to view access options
Article
Publication date: 12 August 2014

Raju Majumdar

The purpose of this paper is to examine the financing practices of unlisted manufacturing firms in India. In particular, the authors seek to explore how unlisted firms…

Abstract

Purpose

The purpose of this paper is to examine the financing practices of unlisted manufacturing firms in India. In particular, the authors seek to explore how unlisted firms finance their growth and the extent to which they rely on external source of finance. Additionally, they explore whether the determinants of indebtedness that explain the borrowing behavior of listed Indian manufacturing firms are capable of explaining the financing decisions of unlisted firms as well.

Design/methodology/approach

This paper uses panel data technique to determine the factors determining indebtedness of unlisted private manufacturing firms in India.

Findings

Unlisted Indian manufacturing firms are largely dependent on bank borrowing for their growth, and access to finance is largely dependent on collateral capacity. The authors results show that the dominant firm factors affecting indebtedness of unlisted firms in India are asset tangibility, firm growth, size, profitability and firm age. Institutional and macroeconomic factors are also observed to be significant influencers of indebtedness.

Research limitations/implications

Unavailability of financial information for the required number of years has resulted in certain firms and sectors of the economy not being included in the sample, and has, hence, affected sample size and representation. Similar problems have limited the period of the study to only four years. The study does not include unlisted services sector firms in the sample, and, hence, its findings cannot be generalized in the context of unlisted firms in India.

Practical implications

There appears to be a strong case for both the policy-maker and financial economist to have a re-look at the financial constraints that unlisted firms face and redefine the role of the banks and financial institutions from being a passive provider of capital to that of a partner in ushering growth. Development of the financial intermediary sector in terms of its reach is expected to favorably influence growth of this sector.

Originality/value

This paper provides empirical evidence on the alternative sources of raising outside capital and the factors determining the capital structure of unlisted manufacturing firms in India.

Details

Management Research Review, vol. 37 no. 9
Type: Research Article
ISSN: 2040-8269

Keywords

Click here to view access options
Article
Publication date: 5 December 2018

Guglielmo Faldetta

The purpose of this paper is to show that indebtedness can have a positive meaning for people who are embedded in social relationships in organizations if it is meant in…

Abstract

Purpose

The purpose of this paper is to show that indebtedness can have a positive meaning for people who are embedded in social relationships in organizations if it is meant in the light of the notion of gratitude, gift-giving and generalized reciprocity.

Design/methodology/approach

The study reviews the literature on the common notion of indebtedness and integrates it with the literature on gratitude, gift-giving and generalized reciprocity.

Findings

The study reveals that through the notion of gratitude, gift-giving and generalized reciprocity people may conceive their indebtedness as gratitude for having received something, so triggering giving behaviors that does not necessarily aim to repay the debt, but to develop and feed their social relationships.

Originality/value

In the past indebtedness has been conceived as a negative feeling. This study reveals that it may have also a bright side when it is applied to people in flesh and bones, as they are immersed in good quality social relationships.

Details

Society and Business Review, vol. 15 no. 1
Type: Research Article
ISSN: 1746-5680

Keywords

Click here to view access options
Article
Publication date: 11 June 2018

Subhendu Datta, Aviral Kumar Tiwari and C.S. Shylajan

According to the 70th round of the National Sample Survey published by the Government of India in 2014, the incidence of indebtedness among households in the rural areas…

Abstract

Purpose

According to the 70th round of the National Sample Survey published by the Government of India in 2014, the incidence of indebtedness among households in the rural areas of Telangana state, India, is twice that of rural all-India. Around 59 per cent of rural households are indebted in Telangana as against 31 per cent all-India. The purpose of this paper is to examine the extent and magnitude of indebtedness among rural households in the Medak district of Telangana state. Further, the authors wanted to identify the sources of credit to these households and for what purpose the loans were utilised.

Design/methodology/approach

To achieve the objective, the authors conducted a primary-level household survey in one of the distressed districts in newly formed state. The authors applied the Bayesian and the Lasso regression methods to identify the factors that impact indebtedness of a household.

Findings

The OLS results based on the Lasso regression results show that among all the explanatory variables, principal occupation, use of modern technology, the rate of interest, household medical expenditure and source of loan are significant, indicating that these variables significantly affect the loan taken by the farmers in the study area. The study shows that alternative sources of non-farm income and promotion of modern technology in agriculture can reduce the incidence of farmers’ indebtedness in India.

Originality/value

The paper contains significant information with regard to indebtedness. It focusses on the issue troubling the authorities the most. It provides the ground realities of the incidence of indebtedness in Medak, one of the most distressed districts of Telangana, a Southern Indian state. There have been very few similar studies done in the newly formed state. The paper has employed an advanced statistical technique, i.e. Heckman’s selection regression technique, to study farmers’ indebtedness in India. It provides a means of correcting for non-randomly selected samples, which otherwise can lead to erroneous conclusions and poor policy.

Details

International Journal of Social Economics, vol. 45 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

Click here to view access options
Article
Publication date: 22 May 2007

Gianni Betti, Neil Dourmashkin, Mariacristina Rossi and Ya Ping Yin

This paper seeks to measure and characterise the extent of consumer over‐indebtedness among the European Union (EU) member states.

Downloads
3085

Abstract

Purpose

This paper seeks to measure and characterise the extent of consumer over‐indebtedness among the European Union (EU) member states.

Design/methodology/approach

The study evaluates alternative measures of over‐indebtedness on the basis of the permanent‐income/life‐cycle theories of consumption behaviour and adopts a subjective approach in identifying over‐indebted households on the basis of European household survey data. It then investigates the main characteristics of over‐indebted households.

Findings

The empirical results reveal that over‐indebtedness was a significant problem across EU member states in the mid‐1990s. Moreover, an inverse relationship emerged between the extent of the over‐indebtedness problem and the extent of consumer borrowing across EU countries.

Research limitations/implications

Anecdotal evidence seemed to suggest that some main factors behind over‐indebtedness could be “market failure” on the credit market, the existence of liquidity constraints and lack of access to formal credit markets. However, a comprehensive and rigorous investigation of the extent and determinants of over‐indebtedness can only be achieved through analysis of more extended household data sets, particularly panel data.

Practical implications

The EU credit markets exhibited certain symptoms of “market failure”, on the one hand, and there was also need for further financial liberalisation in the Southern European countries, on the other hand.

Originality/value

The paper provides a first systematic evaluation of existing measures of consumer over‐indebtedness as well as the first EU‐wide empirical investigation of the problem. It should provide valuable information to the credit industry as well as financial regulatory bodies.

Details

Journal of Economic Studies, vol. 34 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Click here to view access options
Article
Publication date: 23 January 2019

Celso Augusto de Matos, Valter Vieira, Katia Bonfanti and Frederike Monika Budiner Mette

The purpose of this is to propose a model in which materialism is a mediator of the effects of self-esteem, impulsiveness, attitude toward debt, attitude toward credit…

Abstract

Purpose

The purpose of this is to propose a model in which materialism is a mediator of the effects of self-esteem, impulsiveness, attitude toward debt, attitude toward credit card and economic vulnerability on consumer indebtedness. The effects of financial knowledge, financial ability, credit card use and demographic variables are also taken into account.

Design/methodology/approach

Survey data from a sample of 1,245 low-income consumers from Brazil were used to test the hypotheses using structural equation modeling.

Findings

First, materialism has a significant effect on consumer indebtedness; at the same time, it is influenced by self-esteem, impulsiveness and attitude toward debt. Second, materialism acts as a mediator, e.g. higher impulsiveness triggers materialism, which influences debt level. Third, indebtedness is higher for women and those who use a higher number of credit cards and are more educated.

Social implications

Financial education programs should work to increase individual’s perceived ability to manage money, as the individuals who feel less able to manage their personal finances alone (i.e. lower financial ability) presented higher indebtedness.

Originality/value

This study investigates consumer indebtedness by addressing factors that have been analyzed independently in the literature. The research combines psychological, financial and economic factors with credit card use and demographic variables to explain consumer indebtedness. Moreover, the study supports the mediating role of materialism for the antecedents of consumer indebtedness, e.g. impulsiveness and attitude toward debt.

Details

Journal of Consumer Marketing, vol. 36 no. 1
Type: Research Article
ISSN: 0736-3761

Keywords

Click here to view access options
Article
Publication date: 8 January 2019

Kingstone Mutsonziwa and Ashenafi Fanta

Although credit plays a crucial role in modern society, the increased availability of credit is partly responsible for higher levels of debt burden and household over…

Abstract

Purpose

Although credit plays a crucial role in modern society, the increased availability of credit is partly responsible for higher levels of debt burden and household over-indebtedness. However, despite the serious consequences of over-indebtedness on household welfare our understanding of the factors that determine over-indebtedness and the link between over-indebtedness and poverty is limited. The purpose of this paper is therefore to identify drivers of over-indebtedness at an individual level and its link with poverty.

Design/methodology/approach

The authors analysed the determinants of over-indebtedness and its links with poverty employing a binary logistic regression model using data on 51,359 individuals from 11 economies in the Southern Africa Development Community.

Findings

The results suggest that over-indebtedness is driven by, among others, lack of credit literacy, cross-borrowing and income. The results also suggest that over-indebtedness is likely to impoverish the indebted.

Practical implications

Policies that encourage access to financial services such as credit should be designed such that increased financial inclusion does not aggravate poverty and inequality.

Originality/value

The authors used a unique financial inclusion survey that reports data on financial inclusion and poverty measures to identify the determinants of over-indebtedness and its link with poverty.

Details

African Journal of Economic and Management Studies, vol. 10 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

Click here to view access options
Article
Publication date: 15 May 2019

Subash Surendran Padmaja and Jabir Ali

The purpose of this paper is to understand the factors determining the incidence and extent of indebtedness among agricultural households in rural India.

Abstract

Purpose

The purpose of this paper is to understand the factors determining the incidence and extent of indebtedness among agricultural households in rural India.

Design/methodology/approach

This study is based on a nationally representative survey carried out under the 70th Round of the National Sampling Survey Office (NSSO) across rural India. Data on household characteristics, farming characteristics, indebtedness and extent of outstanding credit have been extracted from the comprehensive survey data. Four research hypotheses have been formulated and tested using simple statistical techniques. Further, using the Heckman Selection Model, the study assesses the factors determining the agrarian indebtedness among households in rural India.

Findings

The results from the descriptive analysis show that there is a significant difference in socio-economic and farm characteristics of indebted and non-indebted households. Further, the level of indebtedness differs across sources of the loan, landholding sizes and geographical locations among agricultural households. The results of regression analysis clearly indicate that household characteristics, farm characteristics and sources of loan determine both the incidence and extent of indebtedness among agricultural households.

Research limitations/implications

The main limitation of the study is that only the data giving information regarding the amount of outstanding loans have been collected, and there is no information regarding the amount of credit availed, the purpose and the due date of payment. Further, there is scope to improve the robustness of the empirical model by adding and modifying explanatory variables.

Originality/value

There are only a limited number of empirical studies providing an understanding of the factors determining the indebtedness of agricultural households in rural India. Hence, this study is a good value addition to the existing literature.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 9 no. 2
Type: Research Article
ISSN: 2044-0839

Keywords

1 – 10 of over 2000