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1 – 10 of 756Domenica Barile, Giustina Secundo and Candida Bussoli
This study examines the Robo-Advisors (RA) based on Artificial Intelligence (AI), a new service that digitises and automates investment decisions in the financial and banking…
Abstract
Purpose
This study examines the Robo-Advisors (RA) based on Artificial Intelligence (AI), a new service that digitises and automates investment decisions in the financial and banking industries to provide low-cost and personalised financial advice. The RAs use objective algorithms to select portfolios, reduce behavioural biases, and improve transactions. They are inexpensive, accessible, and transparent platforms. Objective algorithms improve the believability of portfolio selection.
Design/methodology/approach
This study adopts a qualitative approach consisting of an exploratory examination of seven different RA case studies and analyses the RA platforms used in the banking industry.
Findings
The findings provide two different approaches to running a business that are appropriate for either fully automated or hybrid RAs through the realisation of two platform model frameworks. The research reveals that relying solely on algorithms and not including any services involving human interaction in a company model is inadequate to meet the requirements of customers in decision-making.
Research limitations/implications
This study emphasises key robo-advisory features, such as investor profiling, asset allocation, investment strategies, portfolio rebalancing, and performance evaluation. These features provide managers and practitioners with new information on enhancing client satisfaction, improving services, and adjusting to dynamic market demands.
Originality/value
This study fills the research gap related to the analysis of RA platform models by providing a meticulous analysis of two different types of RAs, namely, fully automated and hybrid, which have not received adequate attention in the literature.
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Despite the significance of a gender-diverse workforce, there is a lack of comprehensive review of gender diversity and women's career advancement literature. Moreover, past…
Abstract
Purpose
Despite the significance of a gender-diverse workforce, there is a lack of comprehensive review of gender diversity and women's career advancement literature. Moreover, past literature focuses on women-on-board and other subsets based on outcomes like firm financial and non-financial performance, corporate social performance and board interlocks. The purpose of this study is to examine the research on gender diversity and women's career advancement through an analysis of 143 articles published during past decade. Theoretical frameworks, contexts and constructs-based contribution to scholarship were reviewed. The authors attempt to highlight key theories, constructs and contexts and provide direction for future research.
Design/methodology/approach
A comprehensive systematic literature review of 143 articles spanning January 2008–March 2023 about gender diversity and women’s career advancement was conducted.
Findings
Majority of the past studies have focused on women on board and top management team, and most of them have been conducted in the context of the USA and China. There is no specific industry which has been covered extensively. Resource dependency, resource-based views and agency theories are the primary theoretical frameworks used in the past studies. Furthermore, these findings suggest the scope to further focus on women’s retention and career growth initiatives, especially at levels other than top levels, for a stronger leadership pipeline.
Originality/value
This study has been conducted with a focused analysis of the context, constructs and theoretical frameworks, enabling future researchers to decide how and where to focus, to now strengthen retention of women.
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In October 2016, Timothy Sloan, the newly appointed CEO of American banking giant Wells Fargo, faced a massive public-relations crisis. A few weeks earlier, a United States…
Abstract
In October 2016, Timothy Sloan, the newly appointed CEO of American banking giant Wells Fargo, faced a massive public-relations crisis. A few weeks earlier, a United States government agency had announced the results of its regulatory review of the bank and exposed a shocking practice common in the retail division, in which aggressive community bankers had created more than a million fraudulent accounts and credit card applications on behalf of unaware customers for the past several years. Over the next few weeks, the bank—and Sloan's predecessor, John Stumpf, in particular—suffered from harsh criticism from politicians, journalists, and former employees alike, ultimately forcing Stumpf's resignation. As Sloan sought to minimize the public-image backlash and restore general trust in Wells Fargo, he struggled to construct the best communication strategy for the bank's next chapter.
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The aim of this paper is to systematically review the literature published in recognized journals focused on recognition-based heuristics and their effect on investment management…
Abstract
Purpose
The aim of this paper is to systematically review the literature published in recognized journals focused on recognition-based heuristics and their effect on investment management activities and to ascertain some substantial gaps related to them.
Design/methodology/approach
For doing research synthesis, systematic literature review approach was applied considering research studies published within the time period, i.e. 1980–2020. This study attempted to accomplish a critical review of 59 studies out of 118 studies identified, which were published in reputable journals to synthesize the existing literature in the behavioural finance domain-related explicitly to recognition-based heuristics and their effect on investment management activities.
Findings
The survey and analysis suggest investors consistently rely on the recognition-based heuristic-driven biases when trading stocks, resulting in irrational decisions, and an investment strategy constructed by implementing the recognition-based heuristics, would not result in better returns to investors on a consistent basis. Institutional investors are less likely to be affected by these name-based behavioural biases in comparison to individual investors. However, under the context of ecological rationality, recognition-based heuristics work better and sometimes dominate the classical methods. The research scholars from the behavioural finance community have highlighted that recognition-based heuristics and their impact on investment management activities are high profile areas, needed to be explored further in the field of behavioural finance. The study of recognition-based heuristic-driven biases has been found to be insufficient in the context of emerging economies like Pakistan.
Practical implications
The skilful understanding and knowledge of the recognition-based heuristic-driven biases will help the investors, financial institutions and policy-makers to overcome the adverse effect of these behavioural biases in the stock market. This article provides a detailed explanation of recognition-based heuristic-driven biases and their influence on investment management activities which could be very useful for finance practitioners’ such as investor who plays at the stock exchange, a portfolio manager, a financial strategist/advisor in an investment firm, a financial planner, an investment banker, a trader/ broker at the stock exchange or a financial analyst. But most importantly, the term also includes all those persons who manage corporate entities and are responsible for making its financial management strategies.
Originality/value
Currently, no recent study exists, which reviews and evaluates the empirical research on recognition-based heuristic-driven biases displayed by investors. The current study is original in discussing the role of recognition-based heuristic-driven biases in investment management activities by means of research synthesis. This paper is useful to researchers, academicians, and those working in the area of behavioural finance in understanding the role that recognition-based heuristics plays in investment management activities.
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Vasanthi Mamidala, Pooja Kumari and Dakshita Singh
The purpose of this study is to examine the behaviour of retail investors while making an investment decision and how it gets affected by the behavioural biases of the investors…
Abstract
Purpose
The purpose of this study is to examine the behaviour of retail investors while making an investment decision and how it gets affected by the behavioural biases of the investors using a moderated-mediation framework.
Design/methodology/approach
A mixed method approach has been used to fulfil the objectives of the study. In the first study, a qualitative analysis of the interviews with 15 retail investors was conducted. As part of the quantitative study, a total of 201 responses from Indian retail investors were collected using systematic sampling and analysed using structural equation modelling and Process Macro.
Findings
The results indicate that anchoring bias, availability bias, herding bias, switching cost, sunk cost, regret avoidance and perceived threat have a significant effect on retail investors’ investing intention. The attitude of the investors towards investing decisions mediates the effects of behavioural bias and the status quo on investment intention. The results of the moderated-mediation analysis indicate that mediating effect of attitude varied at the low and high-risk aversion of investors.
Practical implications
The findings of this study will help regulators and retail investors to understand the critical behavioural biases which affect the investors’ investing intention.
Originality/value
The paper contributes to the literature on investors’ behaviour, status quo bias theory (SQB) and behavioural bias. This study uniquely proposes a moderated-mediation framework to understand the effects of biases on retail investors’ investment intention.
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Jari Huikku, Elaine Harris, Moataz Elmassri and Deryl Northcott
This study aims to explore how managers exercise agency in strategic investment decisions (SIDs) by drawing on their knowledgeability of the strategic context. Specifically, the…
Abstract
Purpose
This study aims to explore how managers exercise agency in strategic investment decisions (SIDs) by drawing on their knowledgeability of the strategic context. Specifically, the authors address the role of position–practice relations and irresistible causal forces in this conduct.
Design/methodology/approach
The authors examine SID-making (SIDM) practices in four case organisations operating in highly competitive markets, conducting interviews with managers at various levels and analysing company documents. Drawing on strong structuration theory, the authors show how managerial decision makers draw upon their knowledge of organisational context when exercising agency in SIDs.
Findings
The authors provide insights into how SIDM behaviour, specifically agents’ conduct, is shaped by a combination of position–practice relations and the agents’ comprehension of their organisation’s context.
Research limitations/implications
The authors extend the SIDM literature by surfacing the issue of how actors’ conjuncturally-specific knowledge of external structures shapes the general dispositions they draw on in exercising agency in practice.
Originality/value
The authors extend the SIDM literature by surfacing the issue of how actors’ conjuncturally-specific knowledge of external structures shapes the general dispositions they draw on in exercising agency in practice. Particularly, the authors contribute to this literature by identifying irresistible causal forces and illuminating why actors might not resist in SIDM processes, despite having the potential to do so.
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Muhammad Irfan Khan and Athar Iqbal
This is an acceptable fact that firms put efforts to maximize shareholders wealth but there is growing demand that firms are also accountable to various stakeholders associated…
Abstract
This is an acceptable fact that firms put efforts to maximize shareholders wealth but there is growing demand that firms are also accountable to various stakeholders associated directly or indirectly with the firms' business activities. Investors now evaluate firm's performance not only from financial perspective but also consider environment, social, and governance (ESG) factors when taking investment decision. ESG is not visible in firm's annual financial reports but investors do not deny its significance when valuing firms. There are increasing interests in ESG by communities, professionals, and government bodies, and all are interested to keep it as part of firms' regular activity and have to relate it with firm performance and efficiency that affects firm value. Still, there are difficulties in integration of ESG factors into investment decision-making, but efforts are being put to overcome all the issues. Firms which consider ESG are in a good position to achieve their long-term financial goals as they are likely to attract capital, lower borrowing costs, mitigate risks, and maximize shareholders value.
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The existing literature offers various perspectives on integrating cryptocurrencies into investment portfolios; yet, there is a gap in understanding the behaviours, attitudes and…
Abstract
Purpose
The existing literature offers various perspectives on integrating cryptocurrencies into investment portfolios; yet, there is a gap in understanding the behaviours, attitudes and cross-investment links of individual investors. This study, grounded in the modern portfolio theory and the random walk theory, aims to add empirical insights that are specific to the UK context. It explores four hypotheses related to the influence of socio-demographics, digital adoption, cross-investment behaviours and financial attitudes on cryptocurrency owners.
Design/methodology/approach
This study uses a logistic regression model with secondary data from the Financial Lives Survey 2020 to assess the factors impacting cryptocurrency ownership. A total of 29 variables are used, categorized into four groups aligned with the hypotheses. Additionally, hierarchical clustering analysis was conducted to further explore the cross-investment links.
Findings
The study reveals a significant lack of diversification among UK cryptocurrency investors, a pronounced inclination towards high-risk investments such as peer-to-peer lending and crowdfunding, and parallels with gambling behaviours, including financial dissatisfaction and a propensity for risk-taking. It highlights the influence of demographic traits, risk tolerance, technological literacy and emotional attitudes on cryptocurrency investment decisions.
Originality/value
This study provides valuable insights into cryptocurrency regulation and retail investor protection, underscoring the necessity for tailored financial education and a holistic regulatory approach for investment products with comparable risk levels, with the aim of minimizing regulatory arbitrage. It significantly enhances our understanding of the unique dynamics of cryptocurrency investments within the evolving financial landscape.
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William Newlove Azadda, Samuel Koomson and Senanu Kwasi Klutse
As public awareness of the concept of sustainable development has increased, a new investor market has appeared. These investors will only make investments in sustainable…
Abstract
Purpose
As public awareness of the concept of sustainable development has increased, a new investor market has appeared. These investors will only make investments in sustainable financial instruments. Yet, how corporate managers can effectively exploit this new financing concept to make their companies risk resilient remains unaddressed. This study, a conceptual research, aims to examine the impact of sustainable finance (SF) on business risk resilience (BR) and the impact of SF on risk management infrastructure (RI). It also addresses the impact of RI on BR and the mediating effect of the former between SF and BR in the corporate world. Finally, this research explores the moderating effect of managerial capability (MC) and firm technology-focused innovation capability (IC) between SF and RI.
Design/methodology/approach
This study incorporates both theoretical and empirical works in the sustainability, innovation, risk management and HRM fields. Afterwards, it constructs a conceptual model alongside suppositions that can be tested in further studies.
Findings
This study proposes that SF will enhance BR and RI. Moreover, RI will promote BR and positively intervene between SF and BR. Furthermore, MC and IC will reinforce the SF–RI impact such that the SF–RI impact will be strengthened for companies whose MCs and ICs are high than low.
Research limitations/implications
This research affords suggestions for researchers in multidisciplinary fields. It reinforces BR and RI by introducing SF, MC and IC as tactical devices. It also serves as a reference point for forthcoming academics to investigate this conceptual model, empirically, in diverse industries worldwide.
Practical implications
Practical lessons for finance, investment and risk managers, as well as corporate investors are discussed.
Originality/value
This study provides a new research model that demonstrates how SF can be exploited to promote BR and build RI. It also shows how RI can bolster BR and how RI can connect SF to BR. This new model also exhibits how MC and IC moderate the impacts of SF and RI. Thus, it attempts to advance existing knowledge and theoretical frameworks.
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