The Impact Of Individual Cultural Values And Religiosity On Financial Preferences

Abstract

In this study, the effect of religiosity and culture on the preference of financial instruments with interest and non-interest was investigated. For this purpose, 1934 people from Turkey was reached through an online survey and data were collected with convenience sampling. Individual preferences were investigated when interest-bearing and interest-free financial instruments had equal returns and interestfree financial instruments had lower returns. Individual cultural values, religiosity and negative opinions on interest were included as determinants of these choices. Individual cultural values were taken in five dimensions, and it was determined that each dimension has positive correlations with both religiosity and negative opinion on interest. The tendency to financial instruments with or without interest was designed as a three-dimensional categorical variable: (1) those who do not want interest return under any circumstances, (2) those who prefer an interest-free investment instrument when the return of an interestfree investment instrument and an interest-bearing investment instrument is equal and (3) those who always prefer an investment instrument with an interest return, and the effect of independent variables were investigated using discriminant analysis. Accordingly, it was determined that three dimensions of individual cultural values -collectivism, masculinity, power distance, and religiosity as well as negative opinion on interest are significant variables in the correct classification. In addition, those between the ages of 31-50 and those with undergraduate and graduate education have a higher tendency toward interest-bearing financial instruments.