Information Asymmetry and the Financial Consumer Protection Policy

Han, Jae-Joon; Jang, Wonchang

doi:10.1080/02185377.2013.864511

Cited by 8 publications

(10 citation statements)

References 6 publications

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“…Again, FL as a proxy of financial knowledge has also been linked to the AT and intention of individuals for stock market participation. The low level of financial knowledge can lead to information asymmetry (Albaity et al , 2019; Han and Jang, 2013) which may affect the individual's participation in stock investments. Again, fear of criticism, resulting from little or no knowledge about the market, is also an important factor to create a hurdle for such participations and keeps investors away from the stock market (Van Rooij et al , 2011).…”

Section: Introductionmentioning

confidence: 99%

Past behaviour, financial literacy and investment decision-making process of individual investors

Raut

2020

IJOEM

150

113

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PurposeThis study aims to explore the importance of past behaviour and financial literacy in the investment decision-making of individual investors and examines the validity of the theory of planned behaviour in this context.Design/methodology/approachThe study used a self-administered questionnaire and adopted the convenience sampling technique followed by a snowball sampling method for the survey to collect data from the individual investors covering the four distinct states of India. Collected data were analysed on AMOS 20.0 using two-step structural equation modelling (SEM).FindingsResults indicated a significant effect of all the predictive variables. Past behaviour showed no significant direct impact on investor's intention; however, it had an indirect significant relationship while mediated by the attitude of investors. The multiple squared correlation (R2) showed that the final model could explain 36% of the variance in investors' intention towards stock investment which signified a successful implementation of the TPB model along with external variables added to it. Moreover, Indian investors were found to be highly influenced, primarily, by social pressure which could be curbed through financial literacy.Practical implicationsA significant importance of subjective norms was found on stock market participation which could be a strategic theme for the government and the policymakers to educate investors through their opinion leaders for increasing their participation. Moreover, by doing so investors could control their behaviour and take rational decisions.Originality/valueThis study extended the understandings of investor's decision-making behaviour using TPB by incorporating the two external variables viz., Financial literacy and past behaviour. The addition of past behaviour is perhaps the novelty of this article since such examination has not been conducted empirically especially in the case of developing countries like India.

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Section: Introductionmentioning

confidence: 99%

Past behaviour, financial literacy and investment decision-making process of individual investors

Raut

2020

IJOEM

150

113

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“…Information asymmetry leads to a high level of uncertainty which may eventually cause a major problem in the financial system such as adverse selection and moral hazard (Bhaskar and Mishra, 2017). In addition, information asymmetry can be evident if the level of literacy in the financial market is low (Han and Jang, 2013). The existing literature suggests that the low financial literacy of consumers leads to a loss of confidence and trust in the financial markets and those who provide financial services (Shen et al , 2016; Gerardi et al , 2010; Karlan et al , 2014; Jäntti et al , 2014).…”

Section: Introductionmentioning

confidence: 99%

The intention to use Islamic banking: an exploratory study to measure Islamic financial literacy

Albaity

Rahman

2019

IJOEM

116

102

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Purpose Several research models have been proposed in the existing literature to understand the intention to use Islamic banking where conventional bank customers are not primarily addressed. Upon measuring the level of Islamic financial literacy (IFL) among the customers of conventional banks in the UAE, the purpose of this paper is to examine the direct and indirect effects of IFL, awareness, cost and benefit, reputation and attitude towards Islamic banking on the intention of potential customers to use Islamic banking. Design/methodology/approach Using judgmental sampling techniques, questionnaires were distributed to working individuals who did not have accounts with Islamic banks. A total of 350 completed and usable questionnaires were received and used for further analysis. The SmartPLS 3.0 software was used to analyse the data. Findings The results revealed that the level of IFL was high across the respondents and differed significantly as a function of gender, income level and years of work experience. The findings showed that IFL, awareness, reputation and attitude towards Islamic banking significantly influenced the intention to use Islamic banking, while cost and benefit appear not to. Interestingly, IFL was negatively correlated with the intention to use Islamic banking, but when the attitude towards Islamic banking mediated the relationship between IFL and the intention to use Islamic banking it then became positive. Research limitations/implications Future research should consider looking at non-Muslim economies, which might be more vulnerable to IFL. In addition, a comparison between the current customers of Islamic banks and potential customers might be relevant to see whether the IFL of the current customers differs from the new customers. Practical implications The implications of the research are twofold. First the study suggests that IFL is crucial for an Islamic bank’s potential new customers. Islamic bank managers should design and focus their policies toward enriching the knowledge of the public about Islamic banks and their products. Second, IFL alone does not lead to a higher level of intention to use Islamic banks unless there is a positive attitude towards such banks. Originality/value To the authors’ knowledge, this is one of the first studies to consider the IFL measure used in this paper. Therefore, this study will be the foundation for future research on IFL.

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“…It help to empower individuals to make educated and effective decisions about their financial resources (Lusardi & Tufano, 2015). It is even considered as the greater aid when it comes to complex financial products, such as investment instruments, variable annuities, and variable life insurance (Han & Jang, 2013). When it comes to global situation, Jamal, Ramlan, Karim, Mohidin and Osman (2015) stated that lack of financial knowledge has been described as a widespread issue at the global level, including developed economies.…”

Section: Financial Knowledgementioning

confidence: 99%

Financial Planning Determinants Among Working Adults During Covid 19 Pandemic

Shaharuddin¹,

Zain²,

Ahmad³

2021

IJARAFMS

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Financial planning of working adults nowadays raised a great concerns as people should grow on par as the country expands economically, especially with the recent economic and social disruption caused by COVID-19 pandemic. Besides, financial planning has become a huge issue addressed by numerous researchers as there are many variables that could influence the individual's financial planning. The purpose of this research is to examine the factors influencing financial planning among working adults during the pandemic. Primary data was derived from a sample size of 260 targeted respondents who's at least 18 years old to 30 years old who works in a company based in Selangor, Malaysia. Purposive sampling applied as the sampling technique. Based on the findings, financial knowledge, financial attitude and financial behavior have a significant impact on financial planning and financial behavior is recognized as the most influential factor to the financial planning of working adults during the COVID-19 pandemic.

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Information Asymmetry and the Financial Consumer Protection Policy

Cited by 8 publications

References 6 publications

Past behaviour, financial literacy and investment decision-making process of individual investors

Past behaviour, financial literacy and investment decision-making process of individual investors

The intention to use Islamic banking: an exploratory study to measure Islamic financial literacy

Financial Planning Determinants Among Working Adults During Covid 19 Pandemic

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