Behavioural propensities and financial risk tolerance: The moderating effect of ethnicity

Rahman, Mahfuzur and Albaity, Mohamed and Isa, Che Ruhana (2020) Behavioural propensities and financial risk tolerance: The moderating effect of ethnicity. International Journal of Emerging Markets, 15 (4). pp. 728-745. ISSN 1746-8809, DOI

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Purpose The purpose of this paper is to explore the influence of several core behavioural propensities on financial risk tolerance (FRT). Additionally, this paper examines the moderating effect of ethnicity on the relationship between behavioural propensities and FRT. Design/methodology/approach A sample of 1,204 completed and usable questionnaires were collected from undergraduate students majoring in business, economics and finance and analysed them using SmartPLS 2.0 software. Findings The findings reveal that propensity for trust has the highest impact on FRT followed by propensity for regret and happiness in life, while propensity for social interaction is not significantly associated with FRT. Ethnicity significantly moderates the relationship between three behavioural propensities (propensity for regret, propensity for trust and happiness in life) and FRT. Originality/value This study contributes to the assessment of individuals' FRT incorporating behavioural propensities, which in turn contributes to the field of behavioural finance.

Item Type: Article
Uncontrolled Keywords: Ethnicity; Financial risk tolerance; Happiness in life; Propensity for regret; Propensity for social interaction; Propensity for trust; G32; G110; M300
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HF Commerce > Business
Divisions: Faculty of Business and Economics > Department of Accounting
Faculty of Business and Economics > Dept of Finance and Banking
Depositing User: Ms Zaharah Ramly
Date Deposited: 10 Mar 2023 02:28
Last Modified: 10 Mar 2023 02:28

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