Title: The proposed theoretical framework of consumer financial market efficiency and the exploration of key consumer credit behaviour factors in a developing economy

Authors: Simangaliso Biza-Khupe; Olukunle Iyanda

Addresses: Department of Accounting and Finance, University of Botswana, P.O. Box 70117, Gaborone, Botswana ' Department of Marketing, University of Botswana, P.O. Box 00701, Gaborone, Botswana

Abstract: The literature identifies a myriad of environmental factors that influence the optimality of consumer financial decisions/choices. Understanding the influence that these factors play in different financial environments and their impact on market efficiency remains an empirical question. First, the paper proposes a consolidated approach that considers relationships and interrelations among various market factors as a measure towards the development of a higher order theory of the efficiency of consumer financial markets. Second, the paper takes the first step towards exploring the mechanics of consumer financial markets in the context of a developing African economy by investigating factors that determine consumer credit behaviour. In particular, the paper explores the key factors related to consumer credit decisions by Botswana consumers using exploratory factor analysis. The implications of the research findings to policy point to a need for a paradigm shift in regulation through 'truth-in-lending' laws for the developing economy.

Keywords: financial environmental factors; consumer decisions; consumer choices; financial decisions; financial choices; financial market efficiency; exploratory factor analysis; consumer credit; Botswana; emerging economies; consumer behaviour.

DOI: 10.1504/IJBEM.2013.052954

International Journal of Business and Emerging Markets, 2013 Vol.5 No.2, pp.101 - 118

Available online: 29 Mar 2013 *

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