Factors Affecting Financial Management Behavior of Individuals of Pakistan: The Moderating Role of Financial Risk Tolerance

2021 ◽  
Author(s):  
Sarah Subhan ◽  
Danish Ahmed Siddiqui
Keyword(s):  
Financial Management ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Management Behavior ◽  
Factors Affecting ◽  
Financial Risk Tolerance ◽  
Moderating Role

Antecedents to responsible financial management behavior among young adults: moderating role of financial risk tolerance

2020 ◽  
Vol 38 (5) ◽  
pp. 1177-1194 ◽  
Author(s):  
Dhananjay Bapat
Keyword(s):  
Young Adults ◽  
Financial Management ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Management Behavior ◽  
Content Type ◽  
Financial Risk Tolerance

PurposeThe 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/approachThe 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.FindingsStructural 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/implicationsThe 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 implicationsDespite 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/valueThe present study from an emerging country will add value to the literature.

Retail Investors’ Financial Risk Tolerance and Risk-taking Behaviour: The Role of Psychological Factors

2021 ◽  
pp. 231971452110582
Author(s):  
Pragati Hemrajani ◽  
Rajni ◽  
Rahul Dhiman
Keyword(s):  
Risk Taking ◽  
Psychological Factors ◽  
Structural Equation ◽  
Financial Risk ◽  
Risk Tolerance ◽  
Individual Investors ◽  
Financial Advisors ◽  
Research Model ◽  
Financial Risk Tolerance

The aim of this article is to look at how two psychological factors affect financial risk tolerance (FRT) and financial risk-taking behaviour (FRB) of individual investors. The study also investigates the role of FRT in mediating the relationship between psychological factors and FRB. A standardized questionnaire was used to collect the information. For the study, a total of 303 completed questionnaires were used. The proposed research model was validated and assessed using partial least squares structural equation modelling. The findings revealed some important experiences. Emotional intelligence and impulsiveness have a significant relationship with both FRT and FRB, according to the results. The findings also support FRT’s position as a mediating factor in the proposed research model. The results emphasize the importance of psychological factors in determining an individual’s FRT and FRB. FRT is a complex mechanism that entails more than just psychological considerations. As a result, further research is needed to decide which additional factors financial advisors can use to increase the explained variance in FRT inequalities.

scholarly journals Factors Influencing Financial Risk Tolerance: A Review

2021 ◽  
Vol 12 (1) ◽  
pp. 296-305
Author(s):  
Mubarokah Bunyamin ◽  
Norwazli Abdul Wahab
Keyword(s):  
Financial Market ◽  
Financial Risk ◽  
Industrial Revolution ◽  
Well Being ◽  
Risk Tolerance ◽  
Geographical Differences ◽  
Health Crisis ◽  
Factors Affecting ◽  
Financial Decisions ◽  
Financial Risk Tolerance

High financial risk tolerance level encourages investors’ participation  in financial market. Thus, elevate their capabilities to achieve their financial goals and support national economic growth and well-being. This paper aims to investigate the factors affecting financial risk tolerance from studies around the globe. A comprehensive review of financial risk tolerance is carried out with a particular attention on factors that impact financial risk tolerance on financial decisions. This study indicates that financial risk tolerance can be explained by demographic profiles, psychology, social, geographical differences, and financial capability factors. These  findings will be useful to professionals, technologists, and financial institutions to identify potential investors based on the indicators concluded with the suggestion on financial technology (FinTech) utilisation. Hence, encouraging participation in the Malaysian financial market during global health crisis and  reaching  economic  well-being  towards industrial revolution 4.0 (IR 4.0).

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