Behavioural propensities and financial risk tolerance: The moderating effect of ethnicity
Document Type
Article
Publication Date
8-10-2020
Abstract
Purpose The purpose of this paper is to explore the influence of several core behavioural propensities on financial risk tolerance (FRT). Additionally, this paper examines the moderating effect of ethnicity on the relationship between behavioural propensities and FRT. Design/methodology/approach A sample of 1,204 completed and usable questionnaires were collected from undergraduate students majoring in business, economics and finance and analysed them using SmartPLS 2.0 software. Findings The findings reveal that propensity for trust has the highest impact on FRT followed by propensity for regret and happiness in life, while propensity for social interaction is not significantly associated with FRT. Ethnicity significantly moderates the relationship between three behavioural propensities (propensity for regret, propensity for trust and happiness in life) and FRT. Originality/value This study contributes to the assessment of individuals' FRT incorporating behavioural propensities, which in turn contributes to the field of behavioural finance.
Keywords
Ethnicity, Financial risk tolerance, Happiness in life, Propensity for regret, Propensity for social interaction, Propensity for trust, G32, G110, M300
Divisions
accounting,Finance_and_Banking
Publication Title
International Journal of Emerging Markets
Volume
15
Issue
4
Publisher
Emerald Group Publishing Ltd
Publisher Location
HOWARD HOUSE, WAGON LANE, BINGLEY BD16 1WA, W YORKSHIRE, ENGLAND