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This paper aims to examine how board composition, political connections and sustainability practices affect risk-taking and performance of firms.

This paper used secondary data and regression technique to analyse the relationship. A sample consisting of 290 firm-year observations was applied in the analysis.

The findings show that a larger board size contributes to greater financial risk; however, this risk can be reduced with more independent directors in the boardroom. An optimal board size with appropriate number of independent directors is desired, as a large board size can be harmful to firm performance. Politically connected firms also generate lower risk-taking and performance, and the double-edged sword effect of political connections needs to be considered. In terms of sustainability practices, firms have to engage in sustainable development to maximise the firms’ value, not ignoring the vital role of women in strategising business performance. However, the effect of sustainability practices on firms’ risk-taking is still not noticeable.

Even though the sample size is not large because of the limited availability of data, the findings, to a certain extent, could be generalised to emerging markets, as most emerging markets do have similar financial and economic developments.

The findings from this paper can be used to support the implementation of sustainability practices, especially in those countries where sustainability initiatives are yet to be widely accepted.

This is one of the first few studies that examined the effect of non-financial information on risk-taking and performance of firms. This study concludes the positive effect of sustainability practices on firm performance.

Given the special feature of institutional investors in Malaysia, the purpose of this paper is to explore how these investors acquire and employ different information sources in their investing decisions.

The study uses self-reported information sources collected via a survey of 66 institutional investors following convenience sampling, and estimates the relationship via Smart-PLS (Partial Least Squares) path modeling.

The results suggest that although investors place greater importance on fundamental and technical indicators, they do not implement these information sources in their decisions. Rather, gathering information from economic statistics and ratios, discussion with colleagues, historical returns of the Malaysian stock market, decisions of other market players, specialized press and stock exchange bulletins, and statements of opinion leaders are more closely related to trading, risk taking, and financial asset holding. This finding supports the limited information processing of bounded rationality, irrespective of the type of information source.

Institutional investors should critically assess the information sources upon which they rely to collect information as irrational information processing may adversely affect the stock market efficiency.

To the authors’ knowledge, this is the first study to explore the unique features of institutional investors in Malaysia in conjunction with their sources of information, and to identify which sources matter when making investing decisions.

This study examines how the importance of external investment environment factors affects stock market perception, and how stock market perception affects stock investments after stock market crash witnessed by individual investors in one of the emerging stock markets.

A cross-sectional survey was administrated among 223 individual investors who experienced stock market crash in 2010–2011 in Bangladesh, and the proposed model was tested by the partial least squares-structural equation modeling PLS-SEM model.

Findings show that the importance of Bangladesh's stock market performance, government policy, economic issues and neighboring country's stock market performance have effects on investors' stock market perception. This perception, in turn, decreases monthly stock trading and short-term investment horizon. The findings further show the mediating effect of stock market perception.

Investors need to carefully consider the external investment environment when they form their stock market perception, as this perception drives stock investments. Analogously, regulators should ensure releasing timely and updated statistics on external investment factors.

Addressing those investors who encountered stock market crash, a set of external investment environment issues, stock market perception and stock investments are new in the literature.

The purpose this paper is to investigate whether family affects financial outcomes and psychological biases in an under-researched context, Bangladeshi small investors.

To achieve the stated research objective, the survey data were collected from 223 small investors from brokerage houses in Dhaka and estimated using regression analysis.

The results indicate that learning from parents, discussion with parents about financial issues and father’s education have the strongest impact on financial outcomes (i.e. financial wealth holding, portfolio value, investment strategy, technical indicator, past perceived and expected portfolio performance) and psychological biases (i.e. herding, risk tolerance and better-than-average). Furthermore, spouse’s education, parental income, marital status and family size explain financial outcomes and psychological biases, but to a lesser extent.

The implications have been discussed for small investors and the family’s role in resulting positive financial outcomes and avoid biases.

This is the first study to take into account a set of family background variables influencing various financial outcomes and psychological biases in the context of Bangladesh.

The purpose of this paper is to examine the relationships among perception of past portfolio returns, optimism and financial decisions.

The relationships are examined using a data set of both retail and institutional investors in Malaysia and estimated using ordinary least square regression.

The results demonstrate that perception of past portfolio returns influences both retail and institutional investors’ trading and risk taking. Optimism measured as relative investment optimism and personal investment optimism similarly influences both groups of investors’ financial decisions. However, perception of past portfolio returns causes only retail investors to exhibit optimism. The results furthermore show that only for retail investors perception of past portfolio returns indirectly influences financial decisions, through the mediating channel of optimism.

The findings on the influences of perception of past portfolio returns and the mediating channel in decision process help to understand the differences between retail and institutional investors. Retail investors are found to be more susceptible to optimism. Therefore, regulators in Malaysia may enhance their initiatives by incorporating the peril of forming optimistic expectations in financial decisions, by giving special focus on retail investors.

This paper focuses on investors’ perception of past portfolio returns and its influence on various financial decisions, unlike past portfolio returns or market returns. Also, this paper is among the first to demonstrate the mediating channel of optimism in investors’ decision process.

The purpose of this paper is to test the competing explanations of stated preferences for firm characteristics, optimism and overconfidence for trading activities in a single framework.

A survey methodology is followed to collect the data among retail investors in Malaysia using simple random sampling.

The findings show simultaneous identification of stated preferences for firm characteristics, optimism and overconfidence as determinants of trading activities. Preferences for firm’s profitability characteristics, management and product-related attributes and risky characteristics are likely to decrease investors’ trading activities. On the other hand, preferences for firm’s liquidity and trading volume characteristics with relative financial-domain optimism, personal investment optimism and better-than-average aspect of overconfidence are likely to increase investors’ trading activities.

This finding implies that investors should be careful not only in assessing firm’s characteristics but also need to understand the effects of optimism and overconfidence in trading decisions.

The study considers various aspects of optimism and overconfidence, and the stated preferences for firm characteristics, unlike one aspect of these behavioral biases and indirect observation of preferences for firm characteristics. Furthermore, the study considers trading frequency, annual portfolio turnover and trading intention, whereas earlier studies considered only one or two of these trading decisions.

The purpose of this paper is to investigate who trade actively in the Malaysian stock market and what determines investors’ active trading decisions.

Using a cross-sectional survey on individual investors, the study identifies active and inactive investors and then, investigates active trading by estimating binary logistic regression.

Active investors in Malaysia are more likely to be male, working in non-finance-related sectors and are more experienced. The likelihood of active trading increases with the number of hours spent on researching investment, very short-term favorable unemployment and economic growth expectations (three-month) and past investment outcomes, whereas this probability decreases with higher cognitive ability and short-term unemployment expectations.

The results imply that regulators may focus on certain groups of investors, based on the result of this study, and provide them training to reduce inactivity in this market. As active trading in response to past investment outcomes indicate rational response, regulators therefore may inform investors to learn about their ability and skill from their prior investment outcome, through educational program. Educational program may also include the role of macroeconomic indicators in active investing decisions.

This is the first study to combine a list of demographic and socio-economic characteristics, investment characteristics, macroeconomic expectations and past investment outcomes together to explain the likelihood of active trading.

This paper aims to study gender differences in preferences for firm characteristics across various groups of investors in Malaysia.

Self-declared preferences are elicited through a survey of 520 investors comprising retail, financial professionals and institutional investors in the Malaysian stock market. Non-parametric (Mann-Whitney and Kruskal-Wallis) tests are computed to achieve the stated objective.

Results reveal that female investors display higher preferences for the liquidity of a firm, dividend payments, trading volume of a firm, stock price and firm’s age than male investors across investor’s groups.

Findings imply that the gender gap in investing behaviour can be partly attributed to gender differences in preferences for firm characteristics.

The findings suggest that the gender gap can be mitigated by giving more priority to the choices of female investors with respect to firm characteristics. In turn, this may reduce a part of the gender gap in investing. Moreover, the findings would assist companies to understand and know how their shareholder’s preferences vary with respect to gender and investor’s groups.

This paper provides evidence concerning the gender gap in investor’s self-declared preferences for firm characteristics across retail, financial professionals and institutional investors in Malaysia, which complements previous studies that used equity holdings data and only two groups of investors.

The purpose of this study is to delineate the factors influencing the use of financial derivatives by non-financial firms in managing their exchange rate exposure. In total, 219 non-financial firms are surveyed in regard to their financial hedging decision.

This study is conducted via a survey and the questionnaires were sent to the treasurers and financial controller of the firms. Descriptive analysis is employed to assess the profiles of the respondents. Then, factor analysis is carried out to determine the factors influencing the use of financial derivatives in Malaysia.

The results indicate that the hedging decision of non-financial firms is influenced by their assertive level toward the market and regulators and also how flexible they are for derivative instruments. The intellectual capability that firms acquire to perform hedging strategies is also vital in influencing them to make hedging decision.

The insights of this survey would assist and prepare firms to hedge their exchange rate risk by employing financial derivatives. Knowing the influences of firms' adoption of currency derivatives would allow policy makers to formulate their policies in boosting the liquidity of Malaysian derivative market.

This study presents findings on the factors influencing the execution of financial hedging by non-financial firms in Malaysia. Survey data are used to seek for the feedback from the market players in order to provide empirical evidence on the corporate use of financial hedging.

This study aims to conduct a bibliometric analysis to provide a comprehensive picture and identify future research directions to enrich the existing literature on behavioral biases.

The data set comprises 518 articles from the Web of Science database. Performance analysis is used to highlight the significant contributors (authors, institutions, countries and journals) and contributions (highly influential articles) in the field of behavioral biases. In addition, network analysis is used to delve into the conceptual and social structure of the research domain.

The current review has identified four major themes: “Influence of behavioral biases on investment decisions,” “Determinants of home bias,” “Impact of biases on stock market variables” and “Investors’ decision-making under uncertainty.” These themes reveal that a majority of studies have focused on equity markets, and research on other asset classes remains underexplored.

This study extracted data from a single database (Web of Science) to ensure standardization of results. Consequently, future research could broaden the scope of the bibliometric review by incorporating multiple databases.

The novelty of this research is to provide valuable guidance by evaluating the existing literature and advancing the knowledge base on the conceptual and social structure of behavioral biases.