Risk Attitudes, Mental Accounting and Overconfidence in Investment Placement Decision During and Post Covid-19

Abstract

The Small and Medium Enterprises is the main pillar the people's economy. SME investment decisions related to how entrepreneurs place their funds is a very determining factor in company performance. The purpose of this study is to analyze and explain: 1) The influence of risk attitudes on company performance through decisions on the placement of working capital funds for small and medium enterprises (SMEs), 2) The effect of risk attitudes on company performance in SMEs 3) the effect of working capital fund placement decisions on the performance of SMEs. The study population was all garment, weaving, carving and batik SMEs in Jepara. 
 The sampling technique is non-probability sampling, using assessment sampling. This study found that overconfidence behavior and risk attitude have a significant influence on investment decision making. Mental accounting doesn’t have a significant influence on investment decision making. The more investors are willing to face risks and the higher the overconfidence will increase investment decisions. The number of investors who are risk seekers in the capital market is a natural thing because stock investment is included in the high-risk investment category. Mental accounting can not influence the investment decision making.

Analysis of Financial Literacy, Financial Inclusion and Mental Accounting on Investment Decisions of The Millenial Generation in Surabaya

“…This is supported by Armansyah (2021); Anggini (2019) dan Santi, Sahara & Kamaludin (2019) show that mental accounting has a significant positive effect on investment decisions. Different results were shown by Novandalina, Ernawati & Adriyanto (2022) that mental accounting did not have a significant effect on investment decision making.…”

The Effect of Digitalization on Improving the Timeliness of Financial Reporting: Evidence from Egyptian Listed Companies

“…The delay of financial reporting may attribute to external auditors. Novandalina, Ernawati and Budiyono (2022) found that audit quality and audit opinion about financial statements had no effect on the timeliness of the presentation of financial statements. Efobi and Okougbo (2014) also found that audit type has no influence the timeliness of financial reporting because auditors cannot change the timeliness of financial reports without their client.…”

“…Efobi and Okougbo (2014) and Hoang, Pham, Thalassinos, and Le (2022) found a negative relationship between the firm size, leverage, performance, and timeliness of financial reporting, while firm age was positive. While Aigienohuwa andEzejiofor (2021), andNovandalina, Ernawati, andBudiyono (2022) found that leverage had no effect on the timeliness of financial reporting.…”

“…Previous studies have documented many important findings about the factors affecting the timing of financial reports, and have provided evidence that the timing of financial reporting is influenced by firm characteristics such as size, profitability, debt-to-equity ratio, and ownership structure, etc. (Almuzaiqer, Ahmad, & Abdul Hamid, 2018;Oraka, Okoye, & Ezejiofor, 2019;Zandi & Abdullah, 2019;Aigienohuwa & Ezejiofor, 2021;Martciesa, 2021;Hoang, Pham, Thalassinos, & Le, 2022;Novandalina, Ernawati, & Budiyono, 2022). For example, Martciesa (2021) found that profitability has a positive effect on the timeliness of financial statements.…”

Factors Affecting Millennials' Perspective on Investment Decision Behavior during the Pandemic

“…A pandemic has caused enormous changes in society, almost all of which have a negative impact on individual and business income (Tonnoir et al, 2021). A study of the various negative effects of the pandemic Covid-19 on investment decisions and attitudes among millennial generation Y is critical (Novandalina et al, 2022), because it has affected investment and financial activity. Investment decision behavior describes how investors gather and manage information to make an investment decision (Slovic et al, 1972).…”