This paper uses a three-dimensional perspective on social capital to investigate how entrepreneurs develop their social capital when relying on bootstrapping strategies becomes insufficient and financing needs to be acquired from external debt and equity financiers. Findings from six case studies of entrepreneurs in the fashion industry show that to acquire funding, due to perceived deficiency in the existing network, entrepreneurs develop the structural dimension by adding relationships based on function. However, when seeking financial information that is perceived as sufficient in the existing network, they do so by developing cognitive and relational dimensions to preexisting network ties.
Purpose
The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Specifically, the authors focus on individual characteristics explaining the investors’ propensity to sell shares in a poorly performing mutual fund.
Design/methodology/approach
The study relies on survey data collected from 1,564 Swedish households in 2013. The authors test the hypotheses considering three different portfolio compositions and portfolio performances. Each composition corresponds to a dependent variable and a separate model which are estimated using ordinal logistic regression.
Findings
The authors find that different forms of financial literacy affect attenuation of the disposition effect. Specifically, the authors find that knowledge about mutual funds and knowledge about current market conditions affect the attenuation of the disposition effect, whereas the authors find no support for the effect of “technical financial knowledge” (e.g. the ability to calculate compound interest rates). The authors also find no support for the effects of risk attitude and saving motives on the attenuation of the disposition bias.
Originality/value
The findings suggest a need for a more fine-grained conceptualization of the financial literacy concept and its effect on investors’ disposition bias. Since an important implication of the findings is that financial literacy could potentially help people overcome behavioral bias, the study provides insights for policymakers as well as into the discussion on the design of consumer education programs.
Purpose
– The purpose of this paper is to investigate entrepreneurs’ network evolution in the start-up phase.
Design/methodology/approach
– Based on the case studies of six fashion start-up firms, this study uses a three-dimensional perspective on social capital (structural, relational, cognitive) to investigate entrepreneurs’ network evolution (i.e. initiation of new relationships) in the start-up phase so as to acquire resources and support for firms’ goals. The study focuses particularly on the understudied cognitive dimension of social capital. The fashion industry provides a relevant research setting because it is characterised by changes in demand, which generate opportunities for entrepreneurship.
Findings
– The findings show that the display of cognitive attributes is important for the creation of structural social capital (the establishment of new relationships). The findings also indicate that relationships initiated based on the cognitive dimension have a high probability of developing into embedded relationships, thereby becoming high in the relational dimension and providing access to private information containing referrals to other actors. Thus, these relationships also promote the continued development of the structural dimension.
Originality/value
– The findings imply that the entrepreneurs’ sets of cognitive attributes constitute an important asset in the creation of social capital. They also point to the importance of signalling these values to potential resource holders. Relationships initiated through the display of cognitive attributes can provide resources without requiring immediate economic remuneration.
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