Capital structure construct: a new approach to behavioral finance
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Author(s)Jose Anselmo Perez ReyesLink to ORCID Index: https://orcid.org/0000-0001-9977-4804
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Montserrat Reyna MirandaLink to ORCID Index: https://orcid.org/0000-0002-2793-6365
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Jorge Vera-MartínezLink to ORCID Index: https://orcid.org/0000-0002-5090-7829
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DOIhttp://dx.doi.org/10.21511/imfi.16(4).2019.08
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Article InfoVolume 16 2019, Issue #4, pp. 86-97
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428 Downloads
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Creative Commons Attribution 4.0 International License
Within the framework of behavioral finance, this research shows that financial behavior can be assessed as a cognitive construct. Using certain variables, a multidimensional “cognitive finance” construct can thus be established. Through a technological – psychometric type design with descriptive data analysis, a factor analysis is presented to determine which latent variables tend to charge significantly in order to assess the validity of the dimensions comprising the construct of capital structure and explore its dimensions in relation to financial theory. A 44-item questionnaire is adapted and applied to a sample of chief financial officers from diverse public and nonpublic companies in Mexico. The analysis reveals the existence of four construct dimensions consistent with corporate financial theory. The model helps to explain how decision-makers react to uncertainty and environmental conditions, directly affecting the valuation of firm’s losses or earnings. As evidenced by the results, application of the Item Response Theory to the field of behavioral finance could open up new avenues to the study of cognitive biases, involved in the financial decision-making process. Thus, this implies that behavioral finance can also be treated as “cognitive finance.”
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JEL Classification (Paper profile tab)C38, G40, G41
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References29
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Tables5
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Figures0
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- Table 1. Items
- Table 2. Rotated component matrix using the VARIMAX method. Cut level: 0.3
- Table 3. Reliability tests of the first instrument (Scale 1).
- Table 4. Reliability tests for the second instrument
- Table 5. Rotated component matrix with the VARIMAX method. Cut level: 0.3
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The effect of the ownership structure on earnings management practices
Sanaa Maswadeh
doi: http://dx.doi.org/10.21511/imfi.15(4).2018.04
Investment Management and Financial Innovations Volume 15, 2018 Issue #4 pp. 48-60 Views: 2136 Downloads: 262 TO CITE АНОТАЦІЯThe objective of this study is to investigate the effect of the ownership structure, which includes concentration ownership, institutional ownership and foreign ownership in the light of the debt ratio and company size as controlling variables in limiting the earnings management practices of the Jordanian industrial companies for the period 2012–2016. The hypotheses of the study were tested using the multiple regression models. Among the most prominent findings of the study are: the explanatory factor (R2) for the independent and control variables accounts for 38% of the change in the earnings management of the Jordanian industrial companies, moreover, a significant effect of the concentration ownership was found in the limitation of earnings management practices; while, there was no significant influence of institutional ownership and foreign ownership on the earnings management practices in Jordanian industrial companies. Major limitation to this study is the only considered listed industrial Jordanian firms. Thus, the generalization of the results to other sectors and diverse economic conditions and regulations may be constrained. Finally, Jordanian policymaker reform policies motivate companies to increase their interest on concentration ownership structure, as the study showed the significant effect of the concentration ownership in the limitation of earnings management practice.
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Retraction: Leaders and decision making: a study of the drivers of courage
Rasoava Rijamampianina
doi: http://dx.doi.org/10.21511/ppm.16(1).2018.31
Problems and Perspectives in Management Volume 16, 2018 Issue #1 pp. 320-329 Views: 1947 Downloads: 171 TO CITE АНОТАЦІЯRetracted on the 15th of October, 2020 by the Journal’s Editor-in-Chief request dated October 12, 2020. The type of retraction – plagiarism.
The journal was asked to retract this article because of plagiarism. The request came from the author of the article. The author informed the journal that original idea published in this paper wasn’t his and asked to remove the article. -
Ownership structure and bank performance
Hamdi Agustin , Sri Indrastuti , Amris Rusli Tanjung , Muhammad Said
doi: http://dx.doi.org/10.21511/bbs.13(1).2018.08
Banks and Bank Systems Volume 13, 2018 Issue #1 pp. 80-87 Views: 1778 Downloads: 462 TO CITE АНОТАЦІЯThe purpose of this study is to evaluate the performance of banks in Indonesia. Specifically, this study has examined the static effect of ownership structure on bank performance in Indonesia over the period 1995–2006. The sample consists of 74 banks, namely 56 private banks, 15 community development banks (BPD), and three federal banks from 1995 to 2006. The data was analyzed using least-squares regression method, the general least squares method, and the method of random effects. The findings of this study show that the BPD performed better compared to private banks. This indicates that BPDs have better performance rather than private banks which is due to the fact that customers can be able to pay loans, they have special knowledge on that area and the performance of BPD is supervised by local government. In addition, the amount of equity, economic growth, financial crisis, and the financial ratios affect the performance of the bank. However, bank status has no effect on bank performance.
