THE BUFFERING ROLE OF FINANCIAL LITERACY ON THE RELATIONSHIP OF HERDING BEHAVIOUR AND INVESTMENT DECISIONS

http://dx.doi.org/10.31703/ger.2022(VII-II).18      10.31703/ger.2022(VII-II).18      Published : Jun 2
Authored by : Roman Ullah , Faqir Sajjad Ul Hassan , Kashif Saleem

18 Pages : 201-212

References

  • Adiputra, I. et al. (2021). "Investors' behavioral biases in the Indonesian stock market." International Journal of Economics, Commerce, and Management, IX(2).
  • Ahearne, A. G., Grieb, T. M., & Wei, L. (2004). Monetary policy and stock market booms. International Journal of Central Banking, 1, 51-78.
  • Al-Tamimi, A. & Kalli, A. B. (No date). Financial literacy and investment decision making.
  • Altman, M. (2012). Financial literacy and the limits of financial behavior modification. The Journal of Consumer Affairs, 46(3), 471-496.
  • AteÅŸ, S., CoÅŸkun, A., & Åžahin, M. A. (2016). Impact of Financial Literacy on the Behavioral Biases of Individual Stock Investors: Evidence from Borsa Istanbul. Business and Economics Research Journal, 7(3), 1–1. https://doi.org/10.20409/berj.2016321805
  • Atkinson, A. B., & Messy, F. (2012). Financial literacy and the demand for financial advice. Journal of Pension Economics & Finance, 11(03), 401-429.
  • Baker, H. K., & Filbeck, G. (Eds.). (2013). Portfolio theory and management. Oxford University Press.
  • Baker, M., & Filbeck, G. (2013). Behavioral finance. South-Western College Pub.
  • Barber, B. M., & Odean, T. (2000). Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. SSRN Electronic Journal, 55(2), 773–806. https://doi.org/10.2139/ssrn.219228
  • Barber, B. M., & Odean, T. (2008). All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors. Review of Financial Studies, 21(2), 785–818. https://doi.org/10.1093/rfs/hhm079
  • Braha, D. (2012). "HBin financial markets: A survey." Journal of Economic Surveys, 26(5), 772-808.
  • Bucher-Koenen, T. & Ziegelmeyer, A. (2011). Does financial literacy improve financial behavior? Evidence from a large-scale natural field experiment. Journal of Business Economics, 81(7), 991-1019.
  • Cakan, E., & Balagyozyan, A. (2016). Sectoral Herding: Evidence from an Emerging Market. Journal of Accounting and Finance, 16(4), 87.
  • Chen, H. and Volpe, R. P. (2002). Financial literacy of the American elderly. Financial Services Review, 11(2), 121-145.
  • Clements, K. et al. (2017). "HBin financial markets: A review." Journal of Behavioral Finance, 18(2), 99-110.
  • Gallagher, D. G., Lopez, A. D., & Wilson, O. J. (2011). The financial literacy of the US population: Results from the 2009 National Financial Capability Study. FINRA Investor Education Foundation.
  • Garg, A., & Gulati, R. (2013). Do investors herd in Indian market. DECISION, 40(3), 181– 196. https://doi.org/10.1007/s40622-013-0015-z
  • Gudjonsson, G. (1988). The reasoning criminal. Rational choice perspectives on offending. Behaviour Research and Therapy, 26(3), 287. https://doi.org/10.1016/0005-7967(88)90023-x
  • Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89(7), 309-322.
  • Hirt, G. A., Block, S. B., (2006). Fundamentals of investment management. McGraw Hill.
  • Hon-Snir, S., Kudryavtsev, A., & Cohen, G. (2012). Stock Market Investors: Who Is More Rational, and Who Relies on Intuition? International Journal of Economics and Finance, 4(5). https://doi.org/10.5539/ijef.v4n5p56
  • Huston, S. J. (2010). Measuring Financial Literacy. Journal of Consumer Affairs, 44(2), 296–316. https://doi.org/10.1111/j.1745-6606.2010.01170.x
  • Jain, J., Walia, N., & Gupta, S. (2019). Evaluation of behavioral biases affecting investment decision making of individualequity investors by fuzzy analytic hierarchy process. Review of Behavioral Finance, ahead-of-print(ahead-of-print). https://doi.org/10.1108/rbf-03-2019-0044
  • Jr., J. F. H., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB- SEM: updated guidelines on which method to use. International Journal of Multivariate Data Analysis, 1(2), 107. https://doi.org/10.1504/ijmda.2017.087624
  • Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–292. https://www.jstor.org/stable/1914185
  • Kengatharan, K. and Kengatharan, C. (2014). "HBand investment decisions: Evidence from the Sri Lankan stock market." International Journal of Economics and Financial Issues, 4(1), 194-200.
  • Komalasari, N. et al. (2020). "HB in stock market: Evidence from Indonesia." International Journal of Economics, Commerce and Management, VIII(8).
  • Landberg, R. (2003). "Individual herding in financial markets." International Journal of Theoretical and Applied Finance, 6(1), 33-46.
  • Lim, K. H. (2012). "HB and its impact on stock returns: Evidence from the Malaysian stock market." International Journal of Economics and Finance, 4(5), 160-167.
  • Lo, A. W. (2004). The Adaptive Markets Hypothesis. The Journal of Portfolio Management, 30(5), 15–29. https://doi.org/10.3905/jpm.2004.442611
  • Lusardi, A., & Mitchell, O. S. (2007). Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205–224. https://doi.org/10.1016/j.jmoneco.2006.12.001
  • Lusardi, A., & Mitchelli, O. S. (2007). Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education. Business Economics, 42(1), 35–44. https://doi.org/10.2145/20070104
  • Mintzberg, H., Ahlstrand, B., & Lampel, J. (1976). Strategy Safari: A Guided TourThrough the Wilds of Strategic Management. Simon and Schuster.
  • Mintzberg, H., Raisinghani, D., & Theoret, A. (1976). The Structure of “Unstructured” Decision Processes. Administrative Science Quarterly, 21(2), 246 https://doi.org/10.2307/2392045
  • Nofsinger, J. R. (2005). Social Mood and Financial Economics. Journal of Behavioral Finance, 6(3), 144–160. https://doi.org/10.1207/s15427579jpfm0603_4
  • Nozick, R. (1993). The Nature of Rationality. Princeton University Press.
  • Pasewark, W. R., & Riley, M. E. (2009). It’s a Matter of Principle: The Role of Personal Values in Investment Decisions. Journal of Business Ethics, 93(2), 237–253. https://doi.org/10.1007/s10551-009-0218-6
  • Persaud, A. (2000). Sending the Herd Off the Cliff Edge: The Disturbing Interaction Between Herding and Market-Sensitive Risk Management Practices. The Journal of Risk Finance, 2(1), 59–65. https://doi.org/10.1108/eb022947
  • Postmus, J. L., hetling, A., & Hoge, G. (2014). Evaluating a Financial Education Curriculum as an Intervention to Improve Financial Behaviors and Financial Well- Being of Survivors of Domestic Violence: Results from a Longitudinal Randomized Controlled Study. Journal of Consumer Affairs, 49(1), 250–266. https://doi.org/10.1111/joca.12057
  • Prechter, R. R. (2016). The Socionomic Theory of Finance. Gainesville: Socionomics Institute Press.
  • Ramadan, I. Z. (2014). Confidence Index Determinants of the Amman Stock Exchange Listed Companies. International Journal of Business and Management, 10(1). https://doi.org/10.5539/ijbm.v10n1p195
  • Shefrin, H., & Statman, M. (2000). Behavioral Portfolio Theory. The Journal of Financial and Quantitative Analysis, 35(2), 127– 151. https://doi.org/10.2307/2676187
  • Son, J., & Park, J. (2018). Effects of financial education on sound personal finance in Korea: Conceptualization of mediationeffects of financial literacy across income classes. International Journal of Consumer Studies, 43(1), 77–86. https://doi.org/10.1111/ijcs.12486
  • Thaler, R. (1980). Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization, 1(1), 39–60. https://doi.org/10.1016/0167-2681(80)90051-7
  • Tversky, A., & Kahneman, D. (1974). Judgment Under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124–1131. https://doi.org/10.1126/science.185.4157.1124
  • Van Rooij, M., Lusardi, A., & Alessie, R. (2009). Financial Literacy and Stock Market Participation. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1476958
  • Yoong, J., & Ferreira, V. R. D. M. (2013). Improving financial education effectiveness through behavioural economics: OECD key findings and way forward. OECD Publishing, 1, 1926-1982.

References

  • Adiputra, I. et al. (2021). "Investors' behavioral biases in the Indonesian stock market." International Journal of Economics, Commerce, and Management, IX(2).
  • Ahearne, A. G., Grieb, T. M., & Wei, L. (2004). Monetary policy and stock market booms. International Journal of Central Banking, 1, 51-78.
  • Al-Tamimi, A. & Kalli, A. B. (No date). Financial literacy and investment decision making.
  • Altman, M. (2012). Financial literacy and the limits of financial behavior modification. The Journal of Consumer Affairs, 46(3), 471-496.
  • AteÅŸ, S., CoÅŸkun, A., & Åžahin, M. A. (2016). Impact of Financial Literacy on the Behavioral Biases of Individual Stock Investors: Evidence from Borsa Istanbul. Business and Economics Research Journal, 7(3), 1–1. https://doi.org/10.20409/berj.2016321805
  • Atkinson, A. B., & Messy, F. (2012). Financial literacy and the demand for financial advice. Journal of Pension Economics & Finance, 11(03), 401-429.
  • Baker, H. K., & Filbeck, G. (Eds.). (2013). Portfolio theory and management. Oxford University Press.
  • Baker, M., & Filbeck, G. (2013). Behavioral finance. South-Western College Pub.
  • Barber, B. M., & Odean, T. (2000). Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. SSRN Electronic Journal, 55(2), 773–806. https://doi.org/10.2139/ssrn.219228
  • Barber, B. M., & Odean, T. (2008). All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors. Review of Financial Studies, 21(2), 785–818. https://doi.org/10.1093/rfs/hhm079
  • Braha, D. (2012). "HBin financial markets: A survey." Journal of Economic Surveys, 26(5), 772-808.
  • Bucher-Koenen, T. & Ziegelmeyer, A. (2011). Does financial literacy improve financial behavior? Evidence from a large-scale natural field experiment. Journal of Business Economics, 81(7), 991-1019.
  • Cakan, E., & Balagyozyan, A. (2016). Sectoral Herding: Evidence from an Emerging Market. Journal of Accounting and Finance, 16(4), 87.
  • Chen, H. and Volpe, R. P. (2002). Financial literacy of the American elderly. Financial Services Review, 11(2), 121-145.
  • Clements, K. et al. (2017). "HBin financial markets: A review." Journal of Behavioral Finance, 18(2), 99-110.
  • Gallagher, D. G., Lopez, A. D., & Wilson, O. J. (2011). The financial literacy of the US population: Results from the 2009 National Financial Capability Study. FINRA Investor Education Foundation.
  • Garg, A., & Gulati, R. (2013). Do investors herd in Indian market. DECISION, 40(3), 181– 196. https://doi.org/10.1007/s40622-013-0015-z
  • Gudjonsson, G. (1988). The reasoning criminal. Rational choice perspectives on offending. Behaviour Research and Therapy, 26(3), 287. https://doi.org/10.1016/0005-7967(88)90023-x
  • Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89(7), 309-322.
  • Hirt, G. A., Block, S. B., (2006). Fundamentals of investment management. McGraw Hill.
  • Hon-Snir, S., Kudryavtsev, A., & Cohen, G. (2012). Stock Market Investors: Who Is More Rational, and Who Relies on Intuition? International Journal of Economics and Finance, 4(5). https://doi.org/10.5539/ijef.v4n5p56
  • Huston, S. J. (2010). Measuring Financial Literacy. Journal of Consumer Affairs, 44(2), 296–316. https://doi.org/10.1111/j.1745-6606.2010.01170.x
  • Jain, J., Walia, N., & Gupta, S. (2019). Evaluation of behavioral biases affecting investment decision making of individualequity investors by fuzzy analytic hierarchy process. Review of Behavioral Finance, ahead-of-print(ahead-of-print). https://doi.org/10.1108/rbf-03-2019-0044
  • Jr., J. F. H., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB- SEM: updated guidelines on which method to use. International Journal of Multivariate Data Analysis, 1(2), 107. https://doi.org/10.1504/ijmda.2017.087624
  • Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263–292. https://www.jstor.org/stable/1914185
  • Kengatharan, K. and Kengatharan, C. (2014). "HBand investment decisions: Evidence from the Sri Lankan stock market." International Journal of Economics and Financial Issues, 4(1), 194-200.
  • Komalasari, N. et al. (2020). "HB in stock market: Evidence from Indonesia." International Journal of Economics, Commerce and Management, VIII(8).
  • Landberg, R. (2003). "Individual herding in financial markets." International Journal of Theoretical and Applied Finance, 6(1), 33-46.
  • Lim, K. H. (2012). "HB and its impact on stock returns: Evidence from the Malaysian stock market." International Journal of Economics and Finance, 4(5), 160-167.
  • Lo, A. W. (2004). The Adaptive Markets Hypothesis. The Journal of Portfolio Management, 30(5), 15–29. https://doi.org/10.3905/jpm.2004.442611
  • Lusardi, A., & Mitchell, O. S. (2007). Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205–224. https://doi.org/10.1016/j.jmoneco.2006.12.001
  • Lusardi, A., & Mitchelli, O. S. (2007). Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education. Business Economics, 42(1), 35–44. https://doi.org/10.2145/20070104
  • Mintzberg, H., Ahlstrand, B., & Lampel, J. (1976). Strategy Safari: A Guided TourThrough the Wilds of Strategic Management. Simon and Schuster.
  • Mintzberg, H., Raisinghani, D., & Theoret, A. (1976). The Structure of “Unstructured” Decision Processes. Administrative Science Quarterly, 21(2), 246 https://doi.org/10.2307/2392045
  • Nofsinger, J. R. (2005). Social Mood and Financial Economics. Journal of Behavioral Finance, 6(3), 144–160. https://doi.org/10.1207/s15427579jpfm0603_4
  • Nozick, R. (1993). The Nature of Rationality. Princeton University Press.
  • Pasewark, W. R., & Riley, M. E. (2009). It’s a Matter of Principle: The Role of Personal Values in Investment Decisions. Journal of Business Ethics, 93(2), 237–253. https://doi.org/10.1007/s10551-009-0218-6
  • Persaud, A. (2000). Sending the Herd Off the Cliff Edge: The Disturbing Interaction Between Herding and Market-Sensitive Risk Management Practices. The Journal of Risk Finance, 2(1), 59–65. https://doi.org/10.1108/eb022947
  • Postmus, J. L., hetling, A., & Hoge, G. (2014). Evaluating a Financial Education Curriculum as an Intervention to Improve Financial Behaviors and Financial Well- Being of Survivors of Domestic Violence: Results from a Longitudinal Randomized Controlled Study. Journal of Consumer Affairs, 49(1), 250–266. https://doi.org/10.1111/joca.12057
  • Prechter, R. R. (2016). The Socionomic Theory of Finance. Gainesville: Socionomics Institute Press.
  • Ramadan, I. Z. (2014). Confidence Index Determinants of the Amman Stock Exchange Listed Companies. International Journal of Business and Management, 10(1). https://doi.org/10.5539/ijbm.v10n1p195
  • Shefrin, H., & Statman, M. (2000). Behavioral Portfolio Theory. The Journal of Financial and Quantitative Analysis, 35(2), 127– 151. https://doi.org/10.2307/2676187
  • Son, J., & Park, J. (2018). Effects of financial education on sound personal finance in Korea: Conceptualization of mediationeffects of financial literacy across income classes. International Journal of Consumer Studies, 43(1), 77–86. https://doi.org/10.1111/ijcs.12486
  • Thaler, R. (1980). Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization, 1(1), 39–60. https://doi.org/10.1016/0167-2681(80)90051-7
  • Tversky, A., & Kahneman, D. (1974). Judgment Under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124–1131. https://doi.org/10.1126/science.185.4157.1124
  • Van Rooij, M., Lusardi, A., & Alessie, R. (2009). Financial Literacy and Stock Market Participation. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1476958
  • Yoong, J., & Ferreira, V. R. D. M. (2013). Improving financial education effectiveness through behavioural economics: OECD key findings and way forward. OECD Publishing, 1, 1926-1982.

Cite this article

APA

    APA : Ullah, R., Hassan, F. S. U., & Saleem, K. (2022). The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions. Global Economics Review, VII(II), 201-212. https://doi.org/10.31703/ger.2022(VII-II).18

CHICAGO

    CHICAGO : Ullah, Roman, Faqir Sajjad Ul Hassan, and Kashif Saleem. 2022. "The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions." Global Economics Review, VII (II): 201-212 doi: 10.31703/ger.2022(VII-II).18

HARVARD

    HARVARD : ULLAH, R., HASSAN, F. S. U. & SALEEM, K. 2022. The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions. Global Economics Review, VII, 201-212.

MHRA

    MHRA : Ullah, Roman, Faqir Sajjad Ul Hassan, and Kashif Saleem. 2022. "The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions." Global Economics Review, VII: 201-212

MLA

    MLA : Ullah, Roman, Faqir Sajjad Ul Hassan, and Kashif Saleem. "The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions." Global Economics Review, VII.II (2022): 201-212 Print.

OXFORD

    OXFORD : Ullah, Roman, Hassan, Faqir Sajjad Ul, and Saleem, Kashif (2022), "The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions", Global Economics Review, VII (II), 201-212

TURABIAN

    TURABIAN : Ullah, Roman, Faqir Sajjad Ul Hassan, and Kashif Saleem. "The Buffering role of Financial Literacy on the Relationship of Herding Behaviour and Investment Decisions." Global Economics Review VII, no. II (2022): 201-212. https://doi.org/10.31703/ger.2022(VII-II).18